Robotaxis and humanoid robots may grab the spotlight, but Tesla's EV business is still holding up the entire production.It's becoming fashionable to say that Tesla's (TSLA +3.06%) electric vehicle (EV) business is losing importance. Growth has slowed, competition has intensified, and investors increasingly talk about robotaxis and humanoid robots as the company's "real" future.That framing is understandable, but it's also incomplete.Tesla's EV business may no longer be the star of the story, but it remains ...

This story was originally published on CFO Dive. To receive daily news and insights, subscribe to our free daily CFO Dive newsletter. Dive Brief: Tesla CFO Vaibhav Taneja sold $1.1 million in stock in his latest sale this week, bringing the total value of shares sold between January and December to date to more than $19 million, according to company filings. Taneja, a veteran of the Austin, Texas-based electric vehicle maker who became CFO in 2023, made many of the sales as part of a trading arrangeme ...

Core Insights - Philippe Laffont, the billionaire head of Coatue Management, is actively adjusting his investment strategy in the AI sector while reducing his stake in Tesla [4][5][9]. Tesla - Laffont reduced his stake in Tesla by 15%, selling over 3.12 million shares since March 31, 2023, which represents 64% of Coatue's position [8][9]. - Tesla's stock has increased nearly tenfold since Laffont's initial investment, and the company delivered approximately 1.8 million EVs annually in 2023 and 2024 [6]. - Concerns about Tesla's pricing strategy, competitive pressures, and reliance on unsustainable income sources like regulatory credits are influencing Laffont's decision to sell [10][11][12][13]. Alibaba - Laffont significantly increased his investment in Alibaba, purchasing 1,128,826 shares, marking a 130% increase in his holdings [15]. - Alibaba dominates China's e-commerce market with a 44% share of online retail sales, benefiting from a growing middle class [17]. - The company's AI cloud infrastructure is a key growth area, with AI-related product revenue experiencing triple-digit year-over-year growth for eight consecutive quarters [19][20]. - Alibaba's shares are valued at about 16 times forward-year earnings, which is lower than many AI-focused companies, making it an attractive investment opportunity [20].

Core Viewpoint - Tesla is considering the integration of Apple's CarPlay system into its electric vehicles, indicating a significant shift from its previous stance on third-party software integration [1][2]. Group 1: Tesla's Strategy - The potential adoption of CarPlay represents a major departure from Tesla's preference for its proprietary ecosystem, which has been aimed at maintaining control over the in-car experience [1][2]. - Tesla is planning to integrate CarPlay within a window of its existing interface, suggesting that Apple's software may not fully replace Tesla's operating system [3]. Group 2: Industry Context - The move comes as other automakers increasingly emphasize seamless smartphone integration, with Apple CarPlay and Android Auto becoming standard features in many new vehicles [6]. - Major competitors such as Ford, General Motors, and Hyundai already offer Apple CarPlay across most of their vehicle lineups [6]. Group 3: Current Features - Tesla vehicles currently support Apple Music and Spotify, allowing users to stream music directly through the car's infotainment system [4][7].

Core Insights - Tesla CEO Elon Musk is increasingly confident in a transformational idea involving a distributed AI inference network utilizing Tesla's fleet of electric vehicles (EVs) [1][2] Concept and Technical Foundation - Tesla vehicles are equipped with advanced hardware for autonomous driving, including the latest AI inference chips, with each car having up to one kilowatt of inference capability [3] - The collective compute power of tens of millions of cars could reach 100 gigawatts, surpassing current centralized data centers [3] - This power can be harnessed when cars are not actively driving, particularly during charging, converting unused CPU resources into productive assets [3] Strategic and Economic Implications - By leveraging cars for distributed inference, Tesla could avoid the high costs and energy demands associated with building centralized AI data centers [4] - Vehicle owners may choose to participate in this network, potentially generating significant annual revenue and profit even with a small fraction of Tesla's U.S. fleet involved [4] Concerns and Practical Considerations - Practical implementations of this distributed AI network would need to address concerns about battery drain and memory usage, likely prioritizing vehicles that are charging and equipped with sufficient hardware [5] Tesla's AI Future - Analysts, such as Dan Ives from Wedbush, emphasize that Tesla's future narrative is centered around AI transformation, particularly through autonomous and robotics initiatives [6] - Musk's vision for distributed inference positions Tesla as more of an AI and robotics company rather than a traditional automaker [6]

Earnings Overview - A significant number of earnings reports are expected, including from IBM and Tesla, with a trend of earnings surpassing estimates in recent quarters [1][2] - The earnings beat rate is currently at 85%, indicating strong performance, but there are concerns about post-earnings disappointments in share prices [4] Tesla Performance - Tesla reported adjusted earnings per share (EPS) of $0.50, missing the expected $0.54, while revenue was $28.1 billion, exceeding estimates [16][25] - Free cash flow for Tesla was reported at $3.99 billion, significantly higher than the expected $1.25 billion, marking a 46% year-over-year increase [17][19] - The company faces challenges due to the loss of U.S. tax credits and rising costs, impacting both revenue and profitability [27][28] Market Reactions - Tesla shares experienced volatility, down approximately 1.5% in after-hours trading despite strong revenue and cash flow figures [20][24] - The stock has seen a 100% increase since April's lows but is only about 8% higher for the year, indicating mixed investor sentiment [19] IBM Performance - IBM's third-quarter revenue was reported at $16.33 billion, beating estimates of $16.1 billion, with software revenue aligning with expectations at $7.21 billion [31][32] - Despite positive earnings, IBM shares fell by 3.5% in after-hours trading, reflecting high expectations and potential disappointment in market reactions [32][33] Sector Performance - The technology sector faced pressure, contributing to declines in major indices, while energy and consumer staples sectors showed resilience [8][9] - Intuitive Surgical was a standout performer, gaining nearly 14% after boosting its growth forecast for Da Vinci procedures [10]

Core Viewpoint - Tesla's shares experienced a significant increase of 33.2% in September, driven by a series of positive developments rather than a single event [1] Group 1: Stock Performance and Investor Sentiment - CEO Elon Musk's purchase of approximately $1 billion worth of Tesla stock on September 12 bolstered investor confidence in the company's future [2] - Musk's leadership and the potential of Tesla's undeveloped technology contribute to the importance of his actions and statements [3] - The market reacted positively to Musk's substantial stock purchase, indicating strong investor sentiment [7] Group 2: Sales Performance and Market Dynamics - The expiration of the federal tax credit for electric vehicles on September 30 led to a pull-forward in EV purchases, with uncertainty regarding the extent of this effect [4] - Tesla reported 481,166 deliveries of its Model 3 and Model Y in the third quarter, representing a 9.4% increase from the previous year [5] Group 3: Future Growth Potential - Investors are increasingly valuing Tesla's potential in the robotaxi business, with approvals for testing autonomous vehicles granted in Arizona and Nevada [6] - Anticipation of a decline in fourth-quarter sales due to the pull-forward effect exists, but the introduction of a lower-cost model could stimulate delivery growth [8] - Momentum in the robotaxi rollout may enhance investor interest, especially if a fully autonomous service is approved [8]

Group 1 - Tesla's stock surge may be temporary, with sales figures exceeding analyst estimates [1] - Ross Gerber predicts that good sales news for Tesla will end in two weeks, leading to uncertainty in fourth-quarter sales performance [2] - The $7,500 IRA credit for EVs will expire in two weeks, prompting Gerber to recommend leasing a Tesla instead of purchasing [3] Group 2 - Gerber has expressed doubts about Tesla's autonomous technology, criticizing the company's camera-only approach and hardware issues [4] - Dan Ives from Wedbush Securities maintains a bullish outlook on Tesla, estimating the AI and autonomous opportunity to be worth at least $1 trillion [5] Group 3 - Tesla's sales figures have been lackluster, with market share in the U.S. dropping below 40% for the first time since 2017 and a 40.2% sales decline in Europe [6] - The global EV market experienced a 15% increase in sales, with over 1.7 million electrified vehicles sold in August [7]

Group 1: AI Market Overview - The trend of artificial intelligence (AI) has attracted significant attention and investment, with analysts at PwC predicting a $15.7 trillion boost to global GDP by 2030 [2] - Despite high expectations from Wall Street analysts, billionaire money managers have shown more cautious optimism regarding AI investments [3] Group 2: Duquesne Family Office's Investment Strategy - Stanley Druckenmiller, the lead investor at Duquesne Family Office, sold prominent AI stocks such as Palantir Technologies and Tesla during the March-ended quarter, reducing his total securities from 78 to 52 [5][7] - Tesla shares were reduced by 50%, with 18,837 shares sold, while all 41,710 shares of Palantir were sold [7] - The selling activity may indicate profit-taking, as Druckenmiller's average hold time for stocks is less than nine months [9] Group 3: Valuation Concerns - Concerns about high valuations may have influenced Druckenmiller's decision to sell, with Tesla trading at approximately 130 times forward-year earnings and Palantir at a price-to-sales ratio exceeding 140 [11][12][13] - Historically, leading companies in emerging trends have price-to-sales ratios in the range of 30 to 40, making Palantir's valuation appear excessive [13] Group 4: DocuSign's Market Position - Duquesne Family Office added 1,074,655 shares of DocuSign, valued at approximately $87.5 million, making it a top-10 holding [15][16] - DocuSign holds a 71% share of the digital-signature market, which is part of a total addressable market estimated at $26 billion [17][18] - The company also has a significant opportunity in contract lifecycle management (CLM), valued at an additional $24 billion [18] Group 5: Financial Health and Valuation of DocuSign - DocuSign's balance sheet is strong, with nearly $1.11 billion in cash and no debt, allowing for share repurchases that can positively impact earnings per share over time [21] - The company is trading at 19 times forecast EPS for fiscal 2027, representing a 37% discount to its average forward price-to-earnings ratio over the last five years [22]

Core Insights - The Tesla Diner & Drive-In officially opened in Hollywood, California, combining retro nostalgia with a fast-charging network for Tesla vehicles [1] - The facility serves as a charging station for Tesla drivers while offering classic diner menu items and features like Tesla-branded merchandise and LED movie screens [2] - Initial public interest is high, as indicated by long lines on opening day, suggesting potential for sustained popularity [3] Group 1 - The diner includes 80 v4 Supercharger stalls and a drive-in movie theater that syncs with Tesla vehicle speakers [3] - Elon Musk has expressed intentions to expand the diner concept to major cities globally if the initial location proves successful [4]