Tesla abruptly halts investment in Mexico ahead of the election, Robotaxi launch delayed, stock price pullback may present a good opportunity for layout?

According to Zhitong Finance APP, Elon Musk announced that Tesla (TSLA.US) will suspend further investment in its planned Mexican factory until the results of the US presidential election are clear. This decision is based on the additional tariffs on Mexican manufactured goods promised by Republican candidate Donald Trump, which poses significant political risks.

After the market closed on Tuesday Eastern Time, Tesla (TSLA.US) released its financial report for the second quarter. The report shows that Tesla's revenue in the second quarter was $25.5 billion, exceeding market expectations of $24.8 billion, compared to $24.927 billion in the same period last year, a year-on-year increase of 2%; operating profit in the second quarter was $1.605 billion, a 33% decrease year-on-year, below market expectations of $1.81 billion; net profit decreased by 45% year-on-year from $2.7 billion in the same period last year to $1.48 billion; adjusted earnings per share were $0.52, lower than the market expectation of $0.60.

During Tesla's earnings call on Tuesday, Musk stated, "We need to observe the situation after the election." As the CEO of the electric car manufacturer, he had officially expressed his support for Trump earlier this month. This is the first time Musk has clearly stated his business decisions based on the results of the US presidential election. He explained to investors and analysts, "Trump has indicated that he will impose high tariffs on cars produced in Mexico. If implemented, it would make no sense to invest on a large scale in Mexico. We must wait for further clarity in the political situation."

Musk's decision not only highlights the political risks facing Mexico but also raises questions about the future growth of the electric vehicle industry. Mexico hopes to benefit from US President Joe Biden's nearshore outsourcing policy, and Tesla's Gigafactory is one of the largest investments announced by Mexico in recent years. Additionally, this poses a challenge to the development of the electric vehicle industry supported by the "Inflation Reduction Act" in the US.

Tesla has been delaying its plans to build a factory in Nuevo Leon, northern Mexico, despite local officials insisting that construction of the factory is still ongoing. The office of Samuel Garcia, Governor of Nuevo Leon, did not immediately respond to requests for comments from reporters.

Following the attempted assassination of Trump, Musk quickly expressed his support for him and pledged to provide substantial donations to the political action committee supporting Trump. Although he reportedly planned to donate about $45 million to the committee monthly, according to the committee's latest quarterly financial report, as of the end of June, Musk had not fulfilled this commitment. Whether he has made donations will only be known after the Federal Election Commission receives the documents from the political action committee on October 15.

When asked about the potential impact of Trump's election on Tesla, Musk responded by stating how Trump's plan to cut the Inflation Reduction Act (IRA) would affect car manufacturers. Tesla's business has received significant boosts from IRA's manufacturing and investment tax credits.

Musk said, "If the IRA is cut or repealed, it would be devastating for our competitors and would cause minor harm to Tesla. Tesla's value lies mainly in its autonomous driving technology." It is worth noting that, according to data from the Pew Research Center, only 13% of Republican and right-wing voters are interested in purchasing all-electric vehicles this year, while 45% of Democratic and left-wing voters show a higher level of interest. This data highlights the political and ideological differences in the electric vehicle market, as well as the challenges and opportunities that Tesla faces in promoting the widespread adoption of electric vehicles.

In Tesla's latest financial report, it was revealed that the company has postponed the release of its self-driving taxi service, Robotaxi, to October 10th, two months later than originally planned, to incorporate design changes requested by Musk. This highly anticipated event will provide investors with an opportunity to evaluate Tesla's self-driving technology, which Musk sees as crucial for the company's future. Tesla ultimately plans to offer fully autonomous driving services through a proprietary ride-hailing app similar to Uber.

Reports have indicated that Tesla delayed this event to October in order to have time to manufacture more prototypes. This decision reflects Tesla's ongoing commitment to product refinement and technological innovation, while also highlighting the company's ambition and leadership in the field of autonomous driving