KUALA LUMPUR, Sept 8 (Bernama) -- Bursa Malaysia closed almost flat on Tuesday as buying interest rotated away from index heavyweights towards smaller-cap construction stocks, with sentiment affected by geopolitical uncertainty, said an analyst. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 0.39 of a point to 1,714.40 from Monday’s close of 1,714.79. The benchmark index opened 1.65 points lower at 1,713.14 and moved between 1,710.44 and 1,714.50 throughout the trading session. The broader market was almost evenly balanced, with decliners leading gainers 548 to 546, while 598 counters were unchanged, 1,107 were untraded and 25 were suspended. Turnover expanded to 4.13 billion units valued at RM3.14 billion from 3.60 billion units valued at RM2.45 billion on Monday.
Tesla is expected to report its lowest quarterly margin in over five years, driven by discounts, price cuts, and incentives aimed at boosting electric vehicle (EV) sales. The company is anticipated to pivot towards its robotaxi plans and AI products to rejuvenate investor interest.
Financial Performance:
- Q2 Margin: Analysts predict Tesla's automotive gross margin, excluding regulatory credits, to drop to 16.27%, its lowest since Q1 2019.
- Previous Margins: The margin was 16.36% in Q1 2024 and 18.14% in Q2 2023.
- Sales Strategy: Tesla's use of discounted financing amid high interest rates is considered a less visible price cut, spreading margin pressure over the loan's life.
Strategic Shifts:
Tesla is laying off 10% of its global workforce, reflecting strategic adjustments amid declining sales and aging model lineups. CEO Elon Musk is likely to emphasize the company's focus on self-driving technology and AI products, which are expected to distinguish Tesla from other automakers and drive future stock rallies.
Robotaxi and AI Ventures:
- Robotaxi Launch: Musk announced earlier this year that Tesla would unveil its robotaxi on August 8, but recent reports suggest a delay until October.
- Long-term Opportunity: The robotaxi and AI sectors present significant opportunities over the next few years. Investors are optimistic about Tesla's potential to convert its existing fleet into robotaxis with software upgrades, positioning it ahead in the US market.
- Challenges: Regulatory hurdles remain a significant challenge for the fully autonomous vehicle market. Experts believe it may take years for Tesla to achieve full regulatory approval for autonomous vehicles.
Market and Competition:
- US Market: Tesla is seen as having little competition in the US robotaxi industry due to its extensive fleet.
- China Market: In China, Tesla faces competition from BYD and other companies with advanced driver-assistance systems.
- Regulatory Landscape: A potential Trump administration could expedite regulatory approvals for self-driving technology, benefiting Tesla.
Vehicle Development and Deliveries:
- New Models: Tesla plans to introduce new models by early 2025, using existing platforms and production lines.
- Deliveries: Tesla's Q2 deliveries exceeded analyst expectations but were about 5% lower than the previous year. The company aims to match its 2023 delivery record of 1.81 million vehicles, requiring 977,815 deliveries in H2 2024.
- Growth Projections: Analysts expect a slight increase in deliveries for 2024 and a 15% growth in 2025.
Conclusion:
Tesla's Q2 report is anticipated to reveal a significant dip in margins due to aggressive sales strategies. However, the company's focus on robotaxi and AI ventures could offer long-term growth opportunities. Investors are keen to hear more about Tesla's strategic plans, including regulatory progress and new model developments, as the company navigates a challenging market environment.
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