Tesla’s Earnings Mean More Talk About AI Than EVs

It’s Tesla’s earnings day, which means another chance for Elon Musk’s company to trade in its EV label for AI.

From robotaxis to humanoid robots, Tesla has moved well beyond its initial core of just building electric vehicles.

BI’s William Edwards has a breakdown on all the big projects Wall Street analysts are keen to hear more about on this afternoon’s earnings call.

Tesla has been subtly pivoting its strategy for years, but it’s now reaching a tipping point. The end of the federal EV tax credit last month and the undeniable rise of Chinese rivals have made selling EVs difficult, to say the least.

Sure, Tesla just launched an affordable version of some of its models. But the rollout for those long-awaited cars was somewhat subdued, and reactions were mixed.

Meanwhile, despite concerns about a bubble, AI valuations show no signs of slowing down. So swapping “EV” for “AI” makes a lot of sense these days.

There’s just one problem: The EV side of Tesla is the one bringing in the real money. As big and promising as many of Tesla’s AI plans are, they’re just that … plans.

That puts Musk and Co. in a tricky spot. They need to answer tough questions about the portion of the business that keeps the lights on while trying to keep investors’ eyes on the big wins they say are just around the corner.

Tesla’s AI narrative has been a good pitch so far.

After a brutal start to the year, Tesla’s stock is up nearly 100% over the past six months. A big part of that run has been recent, with shares rising roughly 34% since September. Although Musk definitely helped things along when he disclosed the almost $1 billion worth of Tesla stock he bought.

Musk obviously plays a key role in all of this, but he’s been noticeably quiet. After a high-profile run at the White House, followed by a spectacular breakup with President Donald Trump, he hasn’t made too much noise. True, he did just take a shot at Secretary of Transportation Sean Duffy, but by Musk’s standards, it was pretty mild.

He has good reason to keep his head down. In fact, he’s got 1 trillion of them. That’s what his new proposed pay package could be worth if he hits certain milestones.

There’s no guarantee it’ll be approved when it goes to a vote at Tesla’s annual meeting on November 6. Some major proxy-advisory firms are coming out against it, warning it’s too generous and could shrink shareholder stakes.

But another quarter successfully transitioning Tesla from EV to AI could go a long way in winning him some votes.