Tesla's balance sheet, which the markets have been waiting for with great curiosity, has arrived. There are good aspects and bad aspects in the balance sheet. Tesla had the highest total turnover of all time. Unfortunately, deceptive misinformation abounds on social media. For this reason, I would like to share with you detailed figures about Tesla, of which I am an investor. Let's look at the big picture first. Tesla sold 443956 cars this quarter. This is well above the previous quarter and slightly below the same quarter last year. The year-over-year decline in vehicle sales is 4.8% and the quarter-on-quarter growth is 14.8%. This is important. While turnover was 21301 last quarter, it increased to 25500 this quarter. In other words, there is a 19.7% increase from quarter to quarter. There is a small increase of 2.3% compared to last year, and believe me, this is a rare thing in the automotive industry. Especially while maintaining profitability, Tesla, which I will come to later, also made a significant profit. We see that the turnover on the automobile side is declining. Last year's turnover in automobiles was 21268, this year it was 19878, there is a decrease of 6.5%. But there is a 14.4% increase from quarter to quarter.

There is a tremendous increase on the energy side. Last year 1509, the previous quarter 1635, this quarter 3014. There is a growth of 99.7% from year to year and 84.3% from quarter to quarter. This is very pleasing because when I invest in Tesla, I do not always invest in an automobile company. In fact, I say that I am investing in a broad future with its artificial intelligence and battery. In this respect, this is very pleasing. There is a serious increase in turnover on the services side. 2150 last year, 2608 this year, 2288 in the previous quarter. This, of course, is growing regularly. As the number of vehicles increases, the services also increase. Year-to-year growth is 21.3%, quarter-to-quarter growth is 14%. When we look at the automobile on the gross profit side, last year the profit was 4089, this year it was 3671, there is a profit decrease of 10.2%. Actually, there is a situation that is a little worse than this, which I will talk about later. There is a quarter-to-quarter improvement of 14.3%, with 3671 well above last quarter's 3212.

Healing is always gratifying. But there are some details to this, we will look at it. Wall Street didn't like those details, and I agree with Wall Street. On the energy side, there was a transition from 278 million profit to 740 million gross profit. There is an increase of 166.2% compared to last year and 83.6% compared to the last quarter. When we look at the services side, last year the profit was 166, this year it was 167, there is a small growth from year to year. There is a significant increase from quarter to quarter. When it comes to operating expenses, it increased from 2134 to 2973. Now this seems so depressing at first, but I'll get into the details a little later. But its main reason is restructuring. Restructuring, you know, Tesla laid off a lot of people and their compensation is paid for these layoffs. For example, 2 months' salary and some other restructuring expenses are also incurred. His figure is over $600 million. If we subtract this $600 million, operating expenses come to 2373. In this case, we see that the company is in a better situation than last quarter, and its main operating expenses are slightly higher than last year.

The main operating profitability was determined as 1605. It is 37.1% above last quarter and 13.1% below last year. Profit before tax 1887 is 21.5% above last quarter, 35.8% below last year, and profit after taxes is 1494. 42% below last year and 30.6% above the previous quarter. Earnings per share were 52 cents. But I will go into detail about this in a moment. It seems to be below Wall Street's expectation of 60 cents, but this mainly includes restructuring costs. It looks like this because of its negative effects. Otherwise, we have actually exceeded Wall Street expectations. Last quarter it was 45 cents. In other words, there is an increase of 14.8% from quarter to quarter, and we are 42.5% behind compared to last year. Cash flow has picked up again. Free cash flow increased to 1342. It was negative last quarter. Core operating cash flow is quite positive, by the way. But there is a serious investment expenditure. When we look at the gross profit, especially on the artificial intelligence side, automotive 18.5% is the same as the last quarter. It's a little lower than last year, but there are some details in it. I think they're not very nice.

On the energy side, I liked that despite the huge explosion in turnover, they were able to keep the gross profit the same as last quarter and reduced the prices slightly. But it is well above last year. On the services side, there is a gross profit of 6.4%. Elon Musk never thinks about making a profit here. He always says that this is a continuation of what we do. The operating profit margin was 6.3%, last quarter it was 5.5%, a year ago it was 9.6%. So when we look at all the numbers, excluding 100% turnover, we are in a worse place than last year. There is a significant increase in total turnover. There is a serious improvement on the energy side. But I see that there is wear and tear on the automotive side, and when I look at it compared to the last quarter, there is a very serious improvement. I think the latest bad balance sheet, the reason is simple, the energy business will continue to grow from here. On the automotive side, I think we have come to the end of the discounts. Because interest rate cuts are coming. It will directly reflect positively on this side.

This quarter, Tesla dealt with the launch of Cyber ​​Truck and the ramp up of that vehicle, that is, the increase in production. It will continue a little longer. But even now, it has become America's best-selling total vehicle in terms of electric pick-ups. It beats Rivian and Ford's f150, beats their total. It will increase a little more and we will feel its relief a little in the next quarter. It will get even better in the fourth quarter and the first quarter next year. But most importantly, as I just mentioned, the decline has stopped on the automotive side, which is still Tesla's main business. There is an upward trend. The decrease in interest rates will also support this. But since I am not a memorizer, I love details. Now let's take a look at what's hidden in the details. From there, let's reach a final opinion about Tesla.

First of all, it is useful to say this. Tesla was negatively affected by the exchange rate difference. If it had not conceded a goal due to the exchange rate difference, turnover growth would have been 3.5% year on year instead of 2.3%. This is again a small positive message. Because these exchange rate differences will gradually improve. When interest rates decrease in America, the dollar will settle in a more normal place. Tesla's total gross profit rose 24% quarter-over-quarter to $4.6 billion. This is the highest number since the fourth quarter of 2022. Of course, there were better gross profits in the past, but at least the deterioration has stopped and we are seeing a slight increase again. The most important reason for this gross profit increase is the growth in energy. The reflection of the profit in energy to the total gross profit has a share of around 38% here. This will increase even more because Elon Musk said that we do not have a demand problem on the energy side, we have a supply problem. We are trying to increase it. As you know, they were establishing a new factory, I think this will have a positive impact in the coming days.

Tesla's gross profit on the energy side is equivalent to selling 89,493 vehicles. If they can continue like this, the gross profit made by energy at the end of the year will be equal to the gross profit of 533449 vehicle sales. This is one of the pleasing issues and I hope the rapid growth will continue there, Elon Musk also says this. This will completely change the company's determination in the future. Another pleasing issue is that production costs have decreased slightly in Model 3 and Model 7. There is a decline of $518 per vehicle here. But unfortunately this did not prevent the gross profit from falling. Because the sales price per vehicle decreased to around 1300 dollars. Still, it's great that they are constantly reducing production costs. In fact, such difficult days, that is, periods when they are under constant price pressure due to high interest rates, can benefit these companies. Because they learn to manage their costs much better. Then, when things ease up, they relax quickly too. There are also cost reductions in Model S and Model X. The production cost per vehicle decreased to 60,000 dollars and was 61,000 dollars in the previous quarter. Essentially, the improvements on the battery side have been beneficial. This is again pleasing.

On the other hand, when talking about automotive net gross profit, it is necessary to exclude emission data. Because Tesla sells emission credits to other companies that cannot switch to electric vehicles. Revenue there is $800 million, twice as much as expected. This is actually one of the factors that saved this quarter. But when we take it out, unfortunately the gross profit has decreased and Wall Street attaches more importance to this. Because Wall Street thinks emissions credits are temporary. For example, if Trump is elected, perhaps they will disappear completely. When we take that out, we get to 13.9%, which is exactly what Wall Street didn't like. The stock had retreated roughly 3% - 4% before Elon Musk started speaking, and that was why. But I think this is the critical point. We'll be back from here.

Although I must admit that I did not expect such a decline this quarter. But competitive pressure Elon Musk talked about that a little bit, too. Unfortunately, that pressure has reduced the profit margin. I hope we are at the grassroots level somewhere here now. I think interest rate declines will push this up. But for now, Wall Street looks at the issue like this: it still continues to decline. What Elon Musk said about the future is still up in the air. Then I'll sell it. When we look at it on a model basis, we see that gross profits decreased in both S, X, 3 and Y. S/X has an average gross margin of 22.8%. Model 3 is down to 13.9 in Model Y. We estimate 6% at Cyber ​​Truck. But Cyber ​​Truck is just at the beginning. But when we include emission credits and leasing, the total gross profit in automobiles actually stands at 1.5%. These emissions credits aren't going away anytime soon. Because in fact, most of the rival companies have turned back in their plans to produce electric cars, they are turning back towards more fossil. I think Tesla will make money from here for a long time, but Wall Street doesn't care and doesn't take into account that gross profit has remained stable for a long time. Instead he says the profit margin has decreased, I don't like that.

If you remember, we talked about the increase in main operating expenses from 2523 to 2973. But the main reason for this is that Tesla laid off a lot of workers during this period. Reconstruction cost is 622 million dollars. This is, of course, compensation payments directly added to the cost. The nice thing about this is that this is a one-time expense and it won't happen next quarter. On the contrary, savings from personnel layoffs will be reflected. That's why I think the next quarter will be much more positive in this respect. With the layoffs, the ratio of Tesla's sales and general expenses to turnover has approached former super-efficiency levels. Historically, Tesla was going at levels around 5% or even below 5. It came back from 6.5% to 5%. But we will see the reflection of this in the third and fourth quarters. Because restructuring costs came this quarter.

When we put restructuring expenses, credit emission sales, all these together, Tesla has a net profit of 1478. 1129, which is well above the previous quarter and behind compared to previous years. But I hope that the trend will accelerate significantly upwards again. I know most of you are not used to such detail. Just a line or two, it will rise and fall, trend, level, I'm not like that. I always believe in a little company detailing. The inventory side was relieved for Tesla, they sold the vehicles remaining in inventory from last quarter this quarter. This had a positive impact on free cash flow. Free cash flow from main activities increased to 3 billion 612 million dollars. It dropped to 242 last quarter. This is very pleasing and even a historically high level. It is important for a company like Tesla, which invests a lot in artificial intelligence and batteries, to generate free cash flow.

Tesla has spent nearly $10 billion in Capex investment in the last twelve months. There is a bit of a slowdown in the tempo. They are probably building a data warehouse somewhere in Texas at Tesla, which feeds this artificial intelligence. There is a slight slowdown within this framework, which may ease the free cash flow a little more in the next quarter. Free cash flow after deducting investments was positive 1342 and negative 2531 last quarter. Wall Street was expecting 1900 here. The reason for the difference is basically that the cost of layoffs is higher than expected. Wall Street's prediction was that restructuring costs would be around $400 million. He reached 600, that data broke the calculations and Tesla now has around 30 billion dollars in cash and investments. As you know, he has Bitcoin as an investment, he did not sell it, he has reached 30 billion 720 million cash. This is very important for a company like Tesla, which has very ambitious investment projects.

Yes, financials are like that, they have good aspects and bad aspects. On the automobile side, gross profit is below our expectations, but overall Tesla managed to increase both its turnover and gross profit in this quarter. I don't see a problem here. Wall Street has already reduced Tesla by around 2%. Then, when Elon Musk started speaking, the decline became sharper. Because they were expecting more details from Elon Musk about this postponed robot taxi day. By the way, as you know, it will be in August, normally Elon Musk did not give many details. Elon Musk says if you don't believe in autonomous driving, don't invest in Tesla. The same thing repeated again. I think the same. Investing just in an automobile company is not a wise thing to do. Because these are businesses with low profit margins.

Tesla is valuable when you put the battery, autonomous driving and of course humanoid robots on the car. Musk repeated this, but did not tell us anything concrete. "So I think these vehicles will be on the road in 2025," he said. He talked about 2026. So he didn't talk very concretely, the market didn't like it again. He wanted to hear something very concrete here. He said that they postponed the factory investment in Mexico. Because there is a possibility that Trump will impose taxes on car imports from Mexico. That's why we're going to wait a bit, he said. The market didn't like this either. On the other hand, Elon Musk did not say anything concrete about increasing profit margins and stopping the current price reductions. Thereupon, Wall Street started selling the stock.

While I was preparing this article, the stock had fallen by around 10% with yesterday's sales both within and outside the session. This is due to the fact that Tesla has come this far from $140 with an intense attack. There were also people who said that it is rising, as we call momentum traders, and I should join the trend. But the two issues that bother Wall Street the most are the decline in gross profits on the automobile side and Elon Musk's failure to say very concrete things about autonomous driving, which he attaches great importance to. He says that 12.5 is currently spreading to autonomous driving vehicles, and we will reach fully autonomous driving in 12.6 or 12.7. As you know, in 12.5 they no longer had to hold the steering wheel. But not everyone has it yet, it is being written down and spreading slowly. But these things may take longer, and as this goes on, Wall Street becomes impatient and puts pressure on the stock.

So what will I do? My long-term investment thesis remains intact here. Because I thought Tesla would stop the downward trend on the automotive side and turn around this quarter. Gross profit was not what I expected. But sales numbers started to climb again. Vehicle costs are declining. Interest rates will fall. All of these are positive for me, so there is no change in that regard. The growth in the energy side and the fact that it continues this growth with high profit margins is super pleasing. If this growth continues in a one-year period, it will add almost gross profit from energy to over 500,000 vehicles. This is awesome because Tesla sells around 1802000 vehicles per year. That means adding a quarter of new gross profit. This is again an issue that supports my investment thesis.

Nothing concrete is said about autonomous driving, artificial intelligence, and humanoid robots. But from what I read between the lines and the details, it is clear that things are progressing here, but perhaps a little slower than expected. Tesla is therefore a patience project. If you do not have patience and do not believe in autonomous driving, you should definitely not stay in Tesla. I have made many statements before about what autonomous driving will add to the company. I've been saying this for a long time anyway. If you do not believe in autonomous driving at Tesla and your term is not long, you should not stop. In this context, unfortunately, it may be possible for Tesla to retreat a little further from here. Frankly, I think the trend will break. In other words, if gross profit had remained constant, the trend would have actually broken upward.

Also, Elon was not in great shape. You know, sometimes he's fit, sometimes he's not. He may be too caught up in politics these days. Also, the market started to think that Kamala Harris might be stronger than Trump. Harris support seems to have grown in new polls. He gave a very powerful speech the other day. The woman already has a very strong oratory. That may not be of much use to Tesla either. So Tesla is not an easy investment. It still remains my biggest position. Because I believe autonomous driving is the world's largest artificial intelligence project. But if you don't believe it, you should leave, and if you do, you should close your eyes and wait calmly.

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