Tesla Shares Skid 8% As Investor Day Fails To Live Up To The Hype

Heavy on goals but light on details, Musk's presentation fails to impress

Elon Musk at Gruenheide Gigafactory launch in March 2022

Pool / Getty Images

Consider them unimpressed.

Tesla's (TSLA) long-awaited, first-ever Investor Day failed to wow its target audience, and shares of Tesla fell as much as 8% in early trading Thursday. Tesla's presentation, detailing high-minded yet costly transformative sustainable energy goals, offered scant details on how they will affect the company's financial performance.

Unveiling his so-called Master Plan 3 for the company, CEO Elon Musk outlined five goals all but designed to eliminate the production and use of fossil fuels.

But the presentation—running about three hours with the transcript totaling about 13,000 words—did not include specific product introductions.

In addition, aside from noting its ambitious plan would cost $10 trillion, company officials provided little insight into how it will shape Tesla's profitability moving forward.

"The timeline and cost details were limited," said Colin Langan, an analyst with Wells Fargo in a Reuters report, adding that "the event lacked a Tesla-like surprise."

Not Much New News; Some Production Changes Ahead

In a research report Thursday morning, Wedbush Securities noted that two of the big three themes of the day—the announcement of a new plant in Monterrrey, Mexico, and a commitment to a long-term goal of producing 20 million electric vehicles per year—were widely known and reported upon.

The other key theme, Wedbush indicated, marked the revelation of a new-generation platform that can reduce production costs by up to 50% and will include two new vehicles.

Tesla did not provide a timeline or specifics for those two new vehicles, which many investors had hoped might include a more affordable option than the company currently offers. Wedbush, though, stated "the stage is set" for a car in the sub-$30,000 range "to be produced and scaled globally."

"For investors, it's crystal clear just how far ahead Tesla is of the rest of the auto industry when it comes to producing and scaling EVs, with last night another display of the pure breadth and scale of Tesla globally," Wedbush wrote in its report, reiterating its price target of $225 per share for the company's stock.

The presentation did reveal Tesla's intent to eliminate rare-earth metals as raw materials in its production process. Shares in China-based miners of rare-earth metals fell in early trading Thursday.

Tesla also announced it has designed its own transistor package that can use 75% less silicon carbide. Shares of semiconductor producers using that compound also fell Thursday, with Japan-based ROHM Co. down as much as 6.2%.

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  1. Barron's. "Tesla Stock Drops. Its Analyst Meeting Lacked One Important Thing."

  2. Reuters. "Tesla shares fall by 6% after Musk's 'Master Plan' for EVs fails to impress investors."

  3. Bloomberg. "Tesla Comments Spur Plunge in China Rare-Earth Miner Shares."

  4. Yahoo! Finance

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