SpaceX and Tesla CEO Elon Musk arrives for a U.S. Senate bipartisan forum on artificial intelligence at the U.S. Capitol in Washington, D.C., on Sept. 13, 2023.
- Shares of Tesla fell Thursday after the electric automaker released third-quarter results that missed on top and bottom lines.
- During the company's quarterly call with investors, CEO Elon Musk shared pessimistic commentary about the state of the global economy.
- The disappointing results and cautious commentary were enough to worry some analysts on Wall Street.
Shares of Tesla closed down 9% Thursday, a day after the electric automaker released third-quarter results that missed on top and bottom lines.
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Tesla reported revenue of $23.35 billion and earnings of 66 cents per share, adjusted, both of which fell short of the estimates Wall Street was expecting. It was the first time Tesla has missed on both earnings and revenue since the second quarter of 2019.
During the company's quarterly call with investors, CEO Elon Musk shared pessimistic commentary about the state of the global economy, expressing concerns about the high interest rate environment and said it makes it harder for consumers to buy cars.
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Musk said Tesla is working to bring down the costs of its vehicles, which it will prioritize before the company goes "full-tilt" on building a new factory in Mexico.
"We have to make our products more affordable so people can buy it," Musk said on the call.
Analysts at Bank of America reiterated their neutral rating on the stock and reduced their estimates for Tesla's fourth quarter and out years due to its "lower gross margin profile." The analysts also expressed some surprise about how much time Musk dedicated to discussing the global economy.
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"Interestingly, Elon Musk (CEO) dedicated a large amount of time to the broader macro environment and the effects of currently high interest rates," the Bank of America analysts wrote in a Thursday note.
Similarly, Morgan Stanley analysts said Thursday that despite Tesla's disappointing third-quarter results, the "cautious commentary" around the economy is what "set the tone for the immediate stock reaction."
"In our opinion, 3Q23 was one of the most cautious Tesla conference calls we've heard in years," the Morgan Stanley analysts wrote. They added that it's fair to be concerned about interest rates but questioned how much of Tesla's caution is actually due to competition or slowing demand.
During the investor call, Musk also said he wanted to "temper expectations for Cybertruck," Tesla's sci-fi inspired truck. He noted that it will take a year or longer before the vehicle is a "significant positive cash flow contributor," and that the vehicle will be challenging to mass-manufacture.
"We dug our own grave with Cybertruck," Musk said.
Musk's commentary was enough to worry analysts at Deutsche Bank.
"Tesla's 3Q earnings miss and cautious forward-looking comments around vehicle demand, 2024 growth outlook, slow and expensive ramp of Cybertruck, and uncertain timeline of next-gen platform, reinforce our published concerns on the company's challenging fundamentals heading into next year," the Deutsche Bank analysts wrote in a note Thursday.
The analysts said they have continued concerns over Tesla's 2024 growth.
— CNBC's Lora Kolodny and Michael Bloom contributed to this report.
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