Tesla, the Big Winner of Trump 2.0, Faces Earnings Test!
2min read With Donald Trump elected as the new U.S. president, Elon Musk stands out as a major winner. Tesla's stock has surged significantly, reflecting optimism about the company's prospects under the new administration. However, the upcoming earnings report will test whether Tesla's performance justifies the market's enthusiasm.
In 2024, Tesla delivered 1.79 million vehicles, falling short of analysts' expectations and marking its first annual sales decline in a decade. The much-hyped Cybertruck also failed to generate meaningful momentum. Moreover, Trump's policies favoring traditional energy have cast a shadow over the future of electric vehicles (EVs). Investors will closely monitor Musk's comments on 2025 delivery guidance and whether Tesla's profit margins can recover amid ongoing EV price wars.
Policy Shifts and Tesla's Competitive Edge
The policy changes under the Trump administration will play a significant role in shaping Tesla's future. On one hand, Trump's push to relax autonomous vehicle regulations, including allowing cars without steering wheels to operate on public roads, is a major advantage for Tesla. On the other hand, the administration's plans to reduce EV subsidies could challenge the broader industry. However, Tesla's dominant position and strong resilience may enable it to weather these challenges better than its competitors. If rival EV makers falter, Tesla could capture an even larger share of the market.
FSD and Autonomous Driving Challenges
Tesla's Full Self-Driving (FSD) technology remains a focal point for investors. While the technology's potential is exciting, its commercialization is still in its early stages. HSBC estimates that meaningful commercial deployment of FSD won't materialize until after 2026. Moreover, Tesla faces stiff competition from rivals like Google's Waymo, whose capabilities are highly regarded. Additionally, operating a fleet of robotaxis could come with higher-than-expected costs, which might weigh on profitability.
Optimus Robot: A Test of Musk's Vision
Elon Musk has placed significant emphasis on the development of the Optimus robot. Equipped with dexterous hands capable of performing complex tasks, Optimus could eventually replace human workers on factory floors. Musk has previously stated that mass production of the robot would begin within two years, and the time to deliver on that promise is now. Investors will be watching closely for updates on Optimus's progress and its potential impact on Tesla's operations.
Energy Storage Business: Can Growth Continue?
Tesla's energy storage segment has been a bright spot. In the first three quarters of 2024, Tesla's Megapack installations reached 20.4 GWh, surpassing the 14.7 GWh installed in all of 2023 and tripling the 2022 total. This explosive growth reflects the rapid adoption of renewable energy worldwide. However, Trump's pro-traditional energy policies and plans to reduce renewable energy subsidies could pose risks to this business. Investors are eager to see if Tesla can maintain its growth trajectory in this segment despite potential policy headwinds.
