Tesla reported a hefty drop in second-quarter profits Tuesday due to the effect of price cuts while spending aggressively on autonomous driving and other technology.
Elon Musk’s electric vehicle company reported profits of $1.5 billion, down 45 percent, on revenues of $25.5 billion, which were up two percent behind an increase in its energy generation and storage business.
Tesla’s earnings per share missed analyst expectations, while revenues exceeded them.
The results are the latest in a rough patch for Musk’s EV titan as it contends with rising competitive pressures that prompted a string of price cuts across leading markets.
Tesla laid off 10 percent of its global staff this year — about 14,000 workers — as part of a push to cull expenses to finance major new investments.
That reorganization also resulted in one-time expenses of $622 million in the second quarter due to severance and other costs, said Chief Financial Officer Vaibhav Taneja.
While vehicle sales fell compared to the year-ago period, they rose from the level in the first quarter as “overall consumer sentiment improved,” Tesla said in its earnings presentation.
Although Tesla reaffirmed its expectation that vehicle volume growth may be “notably lower” than last year’s, it said new, more affordable models are set to begin production in the first half of 2025.
Musk announced the accelerated timeframe in April, winning cheers from Wall Street which had sought fresh offerings.
However, he declined on Tuesday to offer new details, saying the topic would be covered in a product launch event.
Tesla said it’s iconoclastic Cybertruck vehicle remains on track for profitability by the end of 2024 as it ramps up production.
– Robotaxi –
Tesla vowed to press on with technological pushes in artificial intelligence and autonomous driving.
The company postponed this month a much-anticipated robotaxi event planned for August until October.
While the “timing of robotaxi deployment depends on technological advancement and regulatory approval, we are working vigorously on this opportunity given the outsized potential value,” Tesla said. (Yahoofinance)