Shares of U.S. electric-vehicle maker Tesla are showing an unexpected trend. Tesla's global sales are falling due to Chief Executive Elon Musk's political activity, but the stock is rising despite weak earnings.
On the 28th (local time), Tesla's stock was trading up more than 2% in after-hours trading around $430 (about 610,000 won). After the closing bell, Tesla said last year it posted its first-ever annual revenue decline, but in after-hours trading the stock at one point surged to $449.76 (about 640,000 won).
This stock move contrasts with Tesla's poor results. In its fourth-quarter report, Tesla said revenue was $24.9 billion (about 36 trillion won) with earnings per share (EPS) of $0.50. Compared with a year earlier, revenue fell 3% and EPS fell 17%.
In particular, full-year revenue last year was $94.8 billion (about 135 trillion won), down 3% from the prior year, with automotive revenue at $69.5 billion (about 99 trillion won), down 10%. This is the first time Tesla's annual revenue has declined. Full-year net income was $3.8 billion (about 5 trillion won), down 46% from a year earlier.
Tesla is losing market share worldwide due to Musk's political engagement and intensifying EV competition. It also ceded the No. 1 spot in global EV sales last year to Chinese automaker BYD. Despite deteriorating results and falling share, the stock is moving in the opposite direction. After plunging when Musk joined the Donald Trump administration, the stock has since steadily climbed and is near a record high.
The reason Tesla's stock is moving opposite its results is that the market is valuing Musk's strategy of focusing on artificial intelligence (AI) and robots. Alongside its earnings release, Tesla said it agreed to invest about $2 billion (about 3 trillion won) in Musk's AI company xAI. Tesla already offers xAI's chatbot "Grok" in its vehicles, and the new investment is expected to accelerate cooperation between the two companies.
The company said, "Tesla is building products and services that bring AI into the physical world," and added, "This investment and master agreement are intended to strengthen our ability to develop and deploy AI products and services at scale in the physical world."
Tesla is also accelerating its robot business, a future growth engine. On the earnings conference call, Musk said the company will halt production of the Model S and Model X in the coming months and convert production space at its Fremont, California, factory to produce the Humanoid Robot "Optimus" by year-end, targeting annual production of 1 million units.
Tesla also revealed it is preparing to begin mass production this year of the dedicated self-driving robotaxi vehicle "Cybercab," the electric truck "Semi," and the energy storage system "Megapack 3." With factories in the United States, China and Germany, Tesla is seen as already having a system capable of quickly mass-producing robotaxis.
Experts say Tesla even has the potential to surpass Waymo, Google's leader in Autonomous Driving. Tasha Keeney, director of investment analysis at investment firm ARK Invest, said, "Waymo has logged more commercial miles, but Tesla has economies of scale that Waymo does not."
The New York Times (NYT) said, "Investors do not value Tesla by the same standards as other automakers," and added, "Shares are near a record high because they believe Musk will put Tesla in the lead in Autonomous Driving taxis and robots that perform complex tasks." The Wall Street Journal (WSJ) said of the results, "They show Tesla's rough road ahead as Musk pushes the EV business to the back burner and focuses on AI and robotics strategy."