As Tesla Stock Disappoints on Earnings Yet Again, CEO Elon Musk Shares That This 1 Thing Is ‘His Biggest Concern’

Core Insights - Tesla's CEO Elon Musk expressed his "biggest concern" regarding maintaining influence over the company as it pivots towards AI, robotaxis, and humanoid robots, particularly the Optimus robot, which he believes could become the biggest product of all time [1][4][6] - Despite a year-to-date stock gain of 12.3%, Tesla's stock has faced volatility, recently dropping about 4% amid ongoing trade deal discussions between the U.S. and China, with China accounting for over 20% of Tesla's total sales in 2024 [2][5] - Tesla's market cap stands at $1.53 trillion, and the company is increasingly focusing on AI and robotics alongside its core electric vehicle business [3] Financial Performance - Tesla's Q3 earnings report revealed a disappointing adjusted EPS of $0.50, down 31% year-over-year, marking the fourth consecutive quarter of weaker-than-expected profits [11] - The company's GAAP gross margin fell by 185 basis points year-over-year to 18%, while operating margin decreased by 501 basis points to 5.8%, driven by rising costs and lower regulatory credit revenue [12] - Operating expenses surged 50% year-over-year to $3.4 billion, partly due to heavy investments in AI and R&D, with tariff-related costs amounting to approximately $400 million during the quarter [12] Strategic Focus - Tesla is committed to accelerating the global transition to sustainable energy through its electric vehicles, solar energy systems, and energy storage products, while also venturing into AI and robotics [3] - Musk's proposed compensation plan, which could increase his stake from 13% to about 25%, is contingent on achieving ambitious growth milestones, including a market cap of $8.5 trillion and deploying 1 million robotaxis [7][8] - The company faces challenges from competition and changing global trade policies, which could impact its operations and profitability [13] Analyst Sentiment - Wall Street analysts are divided on Tesla's stock, with a consensus "Hold" rating; 14 analysts rate it a "Strong Buy," while 9 assign a "Strong Sell" rating, reflecting concerns over profitability and valuation [15]