Analyst Says Tesla (TSLA) Auto Business ‘Continues to Worsen’

Core Insights - Tesla's auto business is facing significant challenges, with a noted decline in sales and market share, particularly in California, where sales fell 12% year over year, leading to a drop in market share from 60.1% in 2023 to 52.5% in 2024 [2] - Despite these challenges, Tesla's stock has seen a 27% increase over the past month, partly due to Elon Musk's $1 billion share buyback, which has positively influenced investor sentiment [2] - The company is also making strides in other areas, such as the rollout of its robotaxi business and the introduction of a refreshed Model Y, which may provide new growth opportunities [3][4] Company Performance - Tesla's global EV sales fell 14% year over year in the second quarter, indicating a broader demand crisis despite an overall increase in electric vehicle purchases in California [2] - The company's auto business is further complicated by the loss of regulatory fines, which previously contributed nearly $3 billion in margins, making the core auto business more challenging [1] - Tesla is progressing towards scaling production of its humanoid robot, which adds another dimension to its long-term growth strategy [4] Market Dynamics - The automotive industry is experiencing a transformative shift with Tesla's entry into the robotaxi market, which could open up a sizable new market beyond its core operations [3] - Investor confidence has improved following Elon Musk's reduced government-related engagements, which may enhance Tesla's near-term execution [3]