Tesla’s Roadster Can Fly. Its Stock Is Still Falling.
(SeaPRwire) – By: Oliver Hawthorne
Tesla’s earnings call on Wednesday will be a test of financial discipline, not product hype. The company unveiled a second-generation Roadster on Thursday, complete with SpaceX thrusters and airborne promises. Shares fell the next day. That tells you how tired the market is of spectacle. The core contradiction is simple. Tesla is burning money on a vivid future while its present is decelerating. Wall Street expects third-quarter earnings of about $0.45 per share, down 10% from a year ago. Revenue is forecast at $27.94 billion, a 0.5% decline. The stock closed Friday at $354.72, down 2.1% on the day and down roughly 7.3% on the week. Compared to December’s close of $449.72, it’s off about 21%. Competition, margin pressure, and capital intensity are doing the damage. Everyone on the call will be polite about the Roadster. The numbers will do the arguing.
Let’s lay out the raw facts. Tesla has already reported 486,532 vehicle deliveries for the quarter. That beat expectations, but it was still about 2% lower than last year. Energy storage hit 13.7 GWh. Capital spending is expected near $7.5 billion for the quarter, versus $2.3 billion a year earlier. Free cash flow will reveal whether Tesla can fund its own expansion without tapping new capital. Analysts currently hold a Moderate Buy consensus, with 14 Buys, 11 Holds, and two Sells. The average price target is $404.87, implying 14.1% upside. JPMorgan’s Rajat Gupta kept a Hold after the Roadster unveiling. He noted Tesla’s claim that the Roadster would eventually be its only manually driven vehicle. Morgan Stanley’s Andrew Percoco also has a Hold with a $400 price target. He cited resilient auto demand, high gas prices, and full self-driving technology. Then he gave the real marker. Austin has more than 300 Cybercabs, an eightfold increase in 30 days. The fleet passed 1 million cumulative unsupervised robotaxi miles, up from roughly 380,000 at Q2 earnings. That is genuine progress. He stayed cautious on Optimus, citing uncertain timelines and scale, plus high spending and cash burn. Regulators are also active. NHTSA is reviewing a petition about robotaxis exceeding speed limits in school zones. That review covers Model Y and Cybercab vehicles using automated driving. NHTSA is separately investigating Cybercab certification against federal safety standards. The standards include rules on traditional driver controls. Options traders expect a 7.43% move in either direction after the report. That is above the 5.95% average of the last four reports. Those moves ranged from 2.28% to 14.52%. The Roadster is targeted for 2028 production. The original model was announced in 2017 with a 2020 delivery target. The gap between promise and delivery is a core part of the Tesla investment case now.
The commercial loop is what matters. Tesla wants to sell cars, then sell software, then run a robotaxi network. The 1 million unsupervised miles are the raw proof for that argument. The 300 Cybercabs in Austin give it a physical testbed. But the loop leaks cash. Spending near $7.5 billion in one quarter is a declaration that Tesla will outspend its current revenue contraction. The market sees it. That is why the stock is down 21% even while analysts hold a $404.87 target. The reported Tesla-SpaceX merger chatter adds more confusion. A car company merging with a space company would be a governance nightmare and a distraction from the balance sheet. Elon Musk will host the call at 5:30 p.m. ET on Wednesday. Listen for free cash flow, Cybercab expansion, and margin commentary. If those hold up, the price target makes sense. If they don’t, the 14.1% upside fades fast. The Roadster can fly. The stock only flies when the cash flow lands.
Author bio: Oliver Hawthorne, principal correspondent at an international technology review, covering the messy collision between hardware ambition and market reality for fifteen years.