Tesla reported lower second-quarter earnings due to a decline in deliveries, causing shares to drop 5% in after-hours trading. Management did not provide delivery guidance for the year, hinting at a possible decline in deliveries in 2025. The affordable vehicle is set to enter production in Q4, supporting a production ramp-up in 2026.

Morningstar maintains a $250 fair value estimate for Tesla, considering the stock overvalued at nearly 30% above fair value. The expiration of the US EV tax credit this year will impact Tesla’s near-term outlook. However, valuation for the Optimus humanoid robot business was raised as Tesla tests this new product.

Tesla aims to transition to an AI software and robotics company, launching new ventures like robotaxis and humanoid robots. Recent testing of robotaxis includes safety features and limited operation within a geofenced area. Management’s goal is for Cybercab robotaxis to enter production in 2026, with full product expected by 2028 without geofences or Tesla employees onboard.

Read more at Morningstar: Declining Deliveries and No Guidance