Tesla (TSLA) Q2 results missed expectations mainly due to weaker auto margins, but continued momentum in Full Self-Driving, or FSD, and Robotaxi deployment remains key future catalysts, BofA Securities said in a note Wednesday.
Automotive gross margin came in at 16.9% versus expectations of 19.4%, impacted by lower regulatory credit revenue and lower vehicle average selling prices. Higher research and development spending, including ramp costs for the Semi, Optimus, and Cybercab programs, also pressured profitability, the firm said.
The company reported record new FSD subscriptions, fleet penetration above 15%, and a 55% North America delivery attach rate. Energy Generation and Storage performed better than expected, the firm said.
Tesla maintained its 2026 capital expenditure outlook of more than $25 billion, while BofA lowered its 2026 EPS estimate to $1.76 from $2.13 due to weaker auto and energy margins and higher R&D spending.
"Tesla continues to scale robotaxi which we think is the key focus item for investors currently," the firm said, adding that the Robotaxi service is now operating in seven markets, including six with unsupervised operations. The company has accumulated about 380,000 unsupervised Robotaxi miles without a major safety incident.
BofA reiterated its buy rating and $460 price target on Tesla. The company's shares were down about 14% in the session.
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