Global (Commonwealth) _ Tesla’s net income dropped 45% in the second quarter compared to the same period last year, as global sales of its electric vehicles declined despite price cuts and low-interest financing.
The Austin-based firm reported on Tuesday that it earned $1.48 billion from April to June, a sharp decrease from $2.7 billion during the same period in 2023. This is Tesla’s second straight quarterly net income drop.
However, second-quarter sales increased slightly by 2% to $25.5 billion, exceeding Wall Street projections of $24.54 billion, according to FactSet. Excluding one-time charges, Tesla earned 52 cents per share, falling short of analyst estimates of 61 cents. Tesla shares fell almost 8% in trading after Tuesday’s closing bell.
The shares fell more than 40% earlier this year, but have subsequently regained the majority of their losses. Tesla said earlier this month that it sold 443,956 vehicles from April to June, a 4.8% decline from the 466,140 shipped during the same time last year.
Although these sales results were higher than the 436,000 experts projected, they nonetheless show a decline in demand for the company’s aging product range. In the first half of the year, Tesla sold around 831,000 vehicles globally, falling significantly short of CEO Elon Musk’s projection of More than 1.8 million for the entire year.
The company’s highly scrutinized gross profit margin, or the amount of sales retained after costs, decreased again to 18%. It was 18.2% a year ago and peaked at 29.1% in Q1 2022. Tesla has reported record quarterly revenue, “despite a difficult operating environment.”
The firm’s energy-storage unit generated well over $3 billion in sales, more than double that of the same time last year. Mr Musk, who has been promoting Tesla as an autonomous car, robotics, and artificial intelligence firm, told investors on a conference call that the company’s “Full Self Driving” system should be able to operate without human supervision by the end of the year.
However, he confessed that his projections “have been overly optimistic in the past”.
Currently, Tesla owners are testing “Full Self Driving” on public roads. The business emphasizes that it cannot drive alone and that human drivers must be ready to intervene at any time. Mr Musk has long stated that the technology will allow a fleet of robotaxis to generate revenue for the firm and Tesla owners by using electric vehicles that would otherwise be parked. He has been advocating self-driving vehicles as a growth driver for Tesla since the “Full Self Driving” hardware was released in late 2015.
However, investigation papers show that the US National Highway Traffic Safety Administration documented 75 collisions and one fatality utilizing “Full Self Driving.” It’s unclear whether the system was to fault. Mr Musk later stated that he does not view government laws as a barrier to deploying robotaxis.
He stated, “If you have billions of miles to show that in the future, unsupervised FSD is better than humans, what regulator could possibly stand in the way of that?” Mr Musk revealed to analysts that the presentation of Tesla’s robotaxi, which was initially scheduled for August, has been pushed back to October 10 owing to vehicle improvements.
He also suggested that they might reveal a “couple of other things” at the occasion. Looking ahead, he stated Tesla expects to begin limited production of the Optimus humanoid robot, which is now working in a factory, as early as Next year.
He predicted that manufacturing for external clients will increase further by 2026. The entrepreneur also stated that Tesla is on pace to debut its more affordable model in the first half of next year. Mr Musk also said that Tesla is waiting to see the results of the US presidential election before choosing whether to build a new facility in Mexico.
Given Republican nominee Donald Trump’s pledge to impose taxes on Mexican-made automobiles, it would be illogical to set up production there, according to Musk, who has officially praised Trump.
Business analyst Seth Goldstein attributed Tesla’s large loss in stock value to a lack of detailed information on vehicles or any quantifiable financial objectives given: “Maybe some investors are saying, ‘You know, we didn’t get more details from management.'”
