Tesla, Inc. ( TSLA ) shares fell sharply in premarket trading on Wednesday, with the pullback coming after the company reported its second-quarter results.

The company reported second-quarter earnings per share that trailed expectations. The Future Fund LLC’s Gary Black said that for an estimated 14-cent per share in restructuring charges, adjusted earnings per share would have handily beat the consensus.

Revenue, however, unexpectedly increased, although by a very modest increment of 2%, and beat the consensus estimate.

What set investors worrying is the fact that some key metrics such as the auto gross margin, excluding regulatory credits, and free cash flow came in shy of estimates and that the one-time regulatory credits nearly doubled, providing a transitory boost to the bottom line. Regulatory credits have a 100% gross margin and typically flow down to the bottom line without any reductions.

Elon Musk’s comments regarding the 2024 volume growth notably lower than 2023 also impacted sentiment.

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The after-hours sell-off in the shares intensified after Musk’s commentary on the earnings call. Summarizing his comments from the first 10 minutes or so, Deepwater Asset Management’s Gene Munster said they implied that “keep your eyes on the prize which is FSD, autonomy, fleets and Optimus.” Tesla investors are used to waiting, the tech analyst said, adding that “The reason why the stock is drifting lower in after-hours is because the dip in margins in June elevated investors’ desire to hear more details on 2025 product announcements.”

With Musk confirming the robotaxi unveil event for Oct. 10, Munster said investors will get the details they’re looking for in three months.

In premarket trading, the stock fell 7.35% to $228.27, according to Benzinga Pro data. The stock is down 0.85% for the year-to-date period.

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