Tesla's financial report outlook: Returning to fundamentals, how will electric vehicles steer the future?

Tesla released its third-quarter financial report after the U.S. stock market closed on Wednesday. For Wall Street, the results may signal a return to fundamentals, as some investors were disappointed by a highly hyped but perceived as lacking in details robot event earlier this month.

Tesla's (TSLA.O) stock has fallen by about 11% year-to-date. Despite the event held in an urbanized setting at a movie studio in Burbank, California, showcasing the Cybercab robot taxi prototype for the first time and promoting a more relaxed, autonomous future of transportation to the public, Tesla still faces common issues - sales and profit growth, slowing demand, competition from emerging electric vehicle manufacturers in China, and Elon Musk's ability to deliver on promises.

As mentioned by MarketWatch last week, Barclays analysts stated, "At least for now, the focus on Tesla is back on fundamentals." These fundamentals include Tesla's demand outlook and signs of stable profits.

"However, given our expectations for a better-than-expected third quarter and a reminder of short-term stability expectations, we believe the third quarter results could be a short-term positive catalyst," analysts said, adding that "profit margins have bottomed out."

But concerns about demand persist. The Wall Street Journal reported last week that Musk has chosen a confidant to oversee Tesla's business in North America and Europe. While the company is advancing its self-driving technology, the technology is under scrutiny by regulators following reports of collisions in conditions such as fog, glaring sunlight, and dust. In one incident, the National Highway Traffic Safety Administration stated that a vehicle "fatally struck a pedestrian," while another incident reported casualties.

The event held in Burbank, named "We, Robot," also introduced a large vehicle called Robovan and an updated version of the Optimus humanoid robot. Musk stated that the robot taxi has no steering wheel or pedals and is expected to be priced below $30,000.

He also mentioned that fully autonomous, unsupervised self-driving technology is expected to be launched in Texas and California next year for the Model 3 and Model Y, with the company expecting to produce Cybercabs "by 2027 at the latest."

However, he noted, "I tend to be too optimistic about timeframes."

Bernstein analyst Toni Sacconaghi called the event "disappointing, shockingly lacking in details." William Blair's Jed Dorsheimer said there was "almost nothing that could put pressure on short sellers in the short term" in the demonstration. Morgan Stanley's Adam Jonas also questioned how much of a threat Tesla's ambitions pose to Uber and Google's Waymo.

However, analysts at Bank of America stated that the event overall met expectations and said, "Now may be a good time to raise low-cost capital."

"[Tesla] is making investments related to robot taxis, robots (especially Optimus), and artificial intelligence, which may require a significant amount of capital," they said. "Considering this, and the headwinds Tesla faces in its core electric vehicle business, we would not be surprised if [Tesla] raises funds, which historically has been able to do at extremely low costs compared to peers”