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Tesla Motors (TSLA - Free Report) reported lower-than-expected second-quarter 2024 earnings. The electric automaker continued its losing earnings streak for the fourth consecutive quarter but surpassed estimates on the revenue front. Shares of Tesla dropped more than 8% in after-market hours.
Following the earnings announcement, ETFs having a substantial allocation to this luxury carmaker are in focus. These include MeetKevin Pricing Power ETF (PP - Free Report) , Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report) , Simplify Volt Robocar Disruption and Tech ETF (VCAR - Free Report) , ARK Innovation ETF (ARKK - Free Report) and ARK Autonomous Technology & Robotics ETF (ARKQ - Free Report) .
Q2 Earnings in Focus
Adjusted earnings per share came in at 52 cents, missing the Zacks Consensus Estimate of 62 cents and declining from the year-ago earnings of 91 cents. Revenues inched up 2% year over year to $25.50 billion and were above the Zacks Consensus Estimate of $25.13 billion.
Tesla remains the top seller of electric vehicles in the United States but is losing market share to a growing number of rivals due to its aging lineup of sedans and SUVs. It offered huge discounts and other incentives to spur demand in China and the United States, which took a toll on the company’s profitability. Its adjusted margin fell to 14.4% from 18.7% in the year-ago quarter (read: Can Tesla ETFs Maintain New-Found Winning Momentum?).
Earlier this month, Tesla reported stronger-than-expected vehicle delivery numbers, which point to improved demand that may help ease concerns around excess inventory for its flagship Model 3/Y.
This leading electric carmaker delivered 443,956 (422,405 Model 3/Y and 21,551 other models) cars worldwide in the second quarter. Though deliveries declined 4.8% from the year-ago quarter, the number was better than the 436,000 that analysts had expected. The annual drop in sales reflects the increased competition in the electric vehicles market. The sales of electric vehicles were at a slower pace, which resulted in investors demanding each car sold be more profitable than before. Tesla produced 410,831 (386,576 Model 3/Y, and 24,255 other models) vehicles during the quarter (read: Tap Tesla's Better-Than-Expected Q2 Deliveries With These ETFs).
Tesla is on track to begin production of new, affordable EV models in early 2025. The new and more affordable models will be built on Tesla's next-generation platform and will be produced on the same production sites as Tesla's current offerings. Additionally, Tesla is working toward increasing production in the current quarter and said its new Cybertruck is on track to make a profit by the end of the year.
Tesla has committed to turn its existing EVs into self-driving vehicles with software updates, which the company calls Full Self-Driving. Further, Tesla is betting on driverless software and artificial intelligence in an attempt to revive sales. It is slated to introduce “robotaxis,” also known as the Cybercab, — a driverless car without a steering wheel or pedals — on Oct 10, a two-month delay from the original plan. The next-generation vehicle could be key to the electric automaker’s survival, especially as competition heats up in the EV space.
MeetKevin Pricing Power ETF is an actively managed ETF that seeks to achieve its investment objective by investing primarily in U.S.-listed equity securities of Innovative Companies, which, in Kevin’s view, have more “pricing power” than their peers. The fund holds a small basket of 21 stocks, with Tesla occupying the second position at 11.7%.
MeetKevin Pricing Power ETF has accumulated $46.5 million in its asset base. It charges 77 bps in annual fees and trades in a lower volume of 18,000 shares a day on average.
Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report)
Consumer Discretionary Select Sector SPDR Fund offers exposure to the broad consumer discretionary space by tracking the Consumer Discretionary Select Sector Index. Holding 52 securities in its basket, Tesla takes the second spot with 18.3% of the assets (read: Consumer Discretionary ETF (XLY - Free Report) Hits New 52-Week High).
Consumer Discretionary Select Sector SPDR Fund is the largest and most popular product in this space, with AUM of $20 billion and an average daily volume of around 3 million shares. It charges 9 in annual fees and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.
Simplify Volt Robocar Disruption and Tech ETF (VCAR - Free Report)
Simplify Volt Robocar Disruption and Tech ETF is an actively managed ETF seeking concentrated exposure to the leader of autonomous driving technology. It employs a call option overlay to seek boosts in performance during extreme moves up in Tesla while holding a tech index for diversification and put options as a hedge (see: all the Alternative Energy ETFs here).
Simplify Volt Robocar Disruption and Tech ETF charges investors 0.95% in annual fees. It has accumulated $5.6 million in its asset base while trading in an average daily volume of 2,000 shares.
ARK Innovation ETF is an actively managed fund investing in companies that benefit from the development of new products or services, technological improvements and advancements in scientific research related to the areas of DNA Technologies and Genomic Revolution, Automation, Robotics, Energy Storage, Artificial Intelligence, Next Generation Internet and Fintech Innovation. The fund holds 32 securities in its basket, with Tesla occupying the top spot at 14.5%.
ARK Innovation ETF has gathered $6.3 billion in its asset base and charges 75 bps in fees per year from investors. It trades in an average daily volume of 8 million shares.
ARK Autonomous Technology & Robotics ETF is an actively managed ETF seeking long-term capital appreciation by investing in companies that benefit from the development of products or services, and technological improvement and advancements in scientific research related to energy, automation and manufacturing, materials, and transportation. This approach results in a basket of 36 stocks, with Tesla occupying the top spot with a 14.3% share.
ARK Autonomous Technology & Robotics ETF has accumulated $804.5 million in its asset base and charges 75 bps in fees per year. It trades in a volume of 91,000 shares a day on average.
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ETFs in Focus Post Tesla's Mixed Q2 Results
Tesla Motors (TSLA - Free Report) reported lower-than-expected second-quarter 2024 earnings. The electric automaker continued its losing earnings streak for the fourth consecutive quarter but surpassed estimates on the revenue front. Shares of Tesla dropped more than 8% in after-market hours.
Following the earnings announcement, ETFs having a substantial allocation to this luxury carmaker are in focus. These include MeetKevin Pricing Power ETF (PP - Free Report) , Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report) , Simplify Volt Robocar Disruption and Tech ETF (VCAR - Free Report) , ARK Innovation ETF (ARKK - Free Report) and ARK Autonomous Technology & Robotics ETF (ARKQ - Free Report) .
Q2 Earnings in Focus
Adjusted earnings per share came in at 52 cents, missing the Zacks Consensus Estimate of 62 cents and declining from the year-ago earnings of 91 cents. Revenues inched up 2% year over year to $25.50 billion and were above the Zacks Consensus Estimate of $25.13 billion.
Tesla remains the top seller of electric vehicles in the United States but is losing market share to a growing number of rivals due to its aging lineup of sedans and SUVs. It offered huge discounts and other incentives to spur demand in China and the United States, which took a toll on the company’s profitability. Its adjusted margin fell to 14.4% from 18.7% in the year-ago quarter (read: Can Tesla ETFs Maintain New-Found Winning Momentum?).
Earlier this month, Tesla reported stronger-than-expected vehicle delivery numbers, which point to improved demand that may help ease concerns around excess inventory for its flagship Model 3/Y.
This leading electric carmaker delivered 443,956 (422,405 Model 3/Y and 21,551 other models) cars worldwide in the second quarter. Though deliveries declined 4.8% from the year-ago quarter, the number was better than the 436,000 that analysts had expected. The annual drop in sales reflects the increased competition in the electric vehicles market. The sales of electric vehicles were at a slower pace, which resulted in investors demanding each car sold be more profitable than before. Tesla produced 410,831 (386,576 Model 3/Y, and 24,255 other models) vehicles during the quarter (read: Tap Tesla's Better-Than-Expected Q2 Deliveries With These ETFs).
Tesla is on track to begin production of new, affordable EV models in early 2025. The new and more affordable models will be built on Tesla's next-generation platform and will be produced on the same production sites as Tesla's current offerings. Additionally, Tesla is working toward increasing production in the current quarter and said its new Cybertruck is on track to make a profit by the end of the year.
Tesla has committed to turn its existing EVs into self-driving vehicles with software updates, which the company calls Full Self-Driving. Further, Tesla is betting on driverless software and artificial intelligence in an attempt to revive sales. It is slated to introduce “robotaxis,” also known as the Cybercab, — a driverless car without a steering wheel or pedals — on Oct 10, a two-month delay from the original plan. The next-generation vehicle could be key to the electric automaker’s survival, especially as competition heats up in the EV space.
ETFs in Focus
MeetKevin Pricing Power ETF (PP - Free Report)
MeetKevin Pricing Power ETF is an actively managed ETF that seeks to achieve its investment objective by investing primarily in U.S.-listed equity securities of Innovative Companies, which, in Kevin’s view, have more “pricing power” than their peers. The fund holds a small basket of 21 stocks, with Tesla occupying the second position at 11.7%.
MeetKevin Pricing Power ETF has accumulated $46.5 million in its asset base. It charges 77 bps in annual fees and trades in a lower volume of 18,000 shares a day on average.
Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report)
Consumer Discretionary Select Sector SPDR Fund offers exposure to the broad consumer discretionary space by tracking the Consumer Discretionary Select Sector Index. Holding 52 securities in its basket, Tesla takes the second spot with 18.3% of the assets (read: Consumer Discretionary ETF (XLY - Free Report) Hits New 52-Week High).
Consumer Discretionary Select Sector SPDR Fund is the largest and most popular product in this space, with AUM of $20 billion and an average daily volume of around 3 million shares. It charges 9 in annual fees and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.
Simplify Volt Robocar Disruption and Tech ETF (VCAR - Free Report)
Simplify Volt Robocar Disruption and Tech ETF is an actively managed ETF seeking concentrated exposure to the leader of autonomous driving technology. It employs a call option overlay to seek boosts in performance during extreme moves up in Tesla while holding a tech index for diversification and put options as a hedge (see: all the Alternative Energy ETFs here).
Simplify Volt Robocar Disruption and Tech ETF charges investors 0.95% in annual fees. It has accumulated $5.6 million in its asset base while trading in an average daily volume of 2,000 shares.
ARK Innovation ETF (ARKK - Free Report)
ARK Innovation ETF is an actively managed fund investing in companies that benefit from the development of new products or services, technological improvements and advancements in scientific research related to the areas of DNA Technologies and Genomic Revolution, Automation, Robotics, Energy Storage, Artificial Intelligence, Next Generation Internet and Fintech Innovation. The fund holds 32 securities in its basket, with Tesla occupying the top spot at 14.5%.
ARK Innovation ETF has gathered $6.3 billion in its asset base and charges 75 bps in fees per year from investors. It trades in an average daily volume of 8 million shares.
ARK Autonomous Technology & Robotics ETF (ARKQ - Free Report)
ARK Autonomous Technology & Robotics ETF is an actively managed ETF seeking long-term capital appreciation by investing in companies that benefit from the development of products or services, and technological improvement and advancements in scientific research related to energy, automation and manufacturing, materials, and transportation. This approach results in a basket of 36 stocks, with Tesla occupying the top spot with a 14.3% share.
ARK Autonomous Technology & Robotics ETF has accumulated $804.5 million in its asset base and charges 75 bps in fees per year. It trades in a volume of 91,000 shares a day on average.