Tesla's earnings and gross profit margin announced last week were lower than market expectations, which raised concerns about Tesla's future profitability. Tesla's market value evaporated overnight by $80 billion.
The situation reversed a few days later. On January 29th Eastern Time, Tesla's stock price surged by 4.19%, with the latest total market value of $606.951 billion. This also led Tesla CEO Musk to surpass luxury goods giant LVMH Chairman Bernard Arnault and regain the world's richest man.
Market confidence comes from the unexpected capital expenditure guidance in Tesla's 10-k report. According to the report, Tesla expects its capital expenditure to exceed $10 billion in 2024 (market consensus is $9.8 billion), and its capital expenditure for 2025 and 2026 will be between $8 billion and $10 billion.
By comparison, Tesla's capital expenditures in 2023 and 2022 were $8.9 billion and $7.16 billion respectively, both of which have maintained growth in the past two years.
Tesla stated that its massive capital expenditure of $10 billion will mainly be used to launch new products, establish or expand production facilities on three continents, and pilot the development of new battery technologies. In addition, the company will continue to expand its turbocharger network and invest in training and products supported by autonomous driving and other artificial intelligence.
It is worth noting that Tesla's next-generation electric vehicle production platform has already appeared in the production schedule, and Tesla sports cars are also under development.
Tesla stated that the next stage of production growth will depend on the continuous increase in factory capacity and the launch of next-generation platforms, as well as the ability to increase available battery supply sources by developing and manufacturing Tesla's own batteries. It is understood that Tesla's main battery suppliers were Panasonic and CATL.
In terms of cash flow, Tesla has also shown optimistic expectations and profit confidence for the future market. Tesla believes in the report that the cash flow generated by the company's operations continues to exceed capital requirements, and the growing sales rate is also conducive to generating positive cash flow. "As long as macroeconomic factors support our current sales trend, we expect our self financing ability to continue."
In addition, Tesla will invest $500 million in the construction of the Dojo supercomputer at the Buffalo Superfactory in New York State for the advancement of its autonomous driving program, which also gives hope to the capital market.
Tesla's previously favored autonomous taxi related information did not appear in the report. The Ark investment research team of celebrity fund manager Keith Wood had previously predicted that Tesla's stock price would reach $2000 in 2027, with Tesla's autonomous taxi business becoming a key driving force.
It is worth noting that Wall Street analysts have previously lowered their expectations for Tesla, and since the beginning of this month, Tesla's stock price has been on a downward trend. This sharp rise has not brought Tesla's stock price back to its early month level.