Tesla stock lower after Musk didn't mention robotaxi fleet, says Gene Munster

Key Concepts

• Robo taxi fleet expansion
• Tesla production ramp
• Delivery growth projections (street vs. whisper vs. Munster's estimate)
• Market reaction to earnings call remarks

Analysis of Tesla's Q4 Earnings Call and Market Reaction

This segment discusses the immediate aftermath of Tesla's Q4 earnings call, focusing on the absence of specific commentary regarding the expanded robo taxi fleet and its impact on the stock price. Gene Munster of Deep Water Asset Management provides insights into the market's reaction and offers his perspective on Tesla's production and delivery outlook.

Absence of Robo Taxi Fleet Commentary

• Main Topic: Elon Musk's prepared remarks during the earnings call did not include any mention of the expanded robo taxi fleet.
• Key Point: This omission was a significant "pressure point" for investors, as it was an anticipated topic of discussion.
• Market Reaction: Immediately following the conclusion of Musk's prepared remarks, Tesla's stock began to trade lower. The call itself started six minutes late, which may have contributed to the initial market sentiment.
• Impact: Munster suggests that the lack of robo taxi commentary was the "catalyst to kind of drifting a little bit lower" in the stock price.

Production and Delivery Outlook

• Positive Commentary on Production: Elon Musk made a positive statement regarding production, indicating that Tesla plans to "ramp production as fast as they can."
• Implications for Deliveries: This statement is interpreted as a potential indicator for next year's deliveries.
• Delivery Growth Projections:
  • Street Estimate: 17% growth.
  • Whisper Number: 10% growth.
  • Munster's Estimate: 5% growth.
• Contradiction in Strategy: Munster finds it counterintuitive for Tesla to discuss ramping production if they anticipate a "flat or down year" for deliveries in the upcoming year. This suggests a potential disconnect or a need for further clarification.
• Positive Read on Deliveries: Despite the perceived contradiction, Munster believes there is a "positive read relative to deliveries" based on the production ramp statement, though he awaits more clarity.

Market Performance

• After-Hours Trading: Gene Munster notes that Tesla's stock was trading near its after-hours session lows.
• Stock Decline: The stock was down by 3.8% at the time of the discussion.

Conclusion

The primary takeaway from this segment is the market's negative reaction to the lack of specific updates on Tesla's robo taxi expansion plans during the Q4 earnings call. While Elon Musk indicated a commitment to ramping production, this was juxtaposed with uncertainty regarding delivery growth projections, leading to a decline in Tesla's stock price. Investors are awaiting further clarification on both the robo taxi strategy and the detailed delivery outlook for the upcoming year.