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Tesla missed Wall Street’s profit estimates for the second quarter of the year, as net income fell by 45 per cent due to slower vehicle deliveries and large-scale lay-offs.
Tesla’s net income of $1.47bn for the three months to the end of June fell well short of analysts’ $1.9bn consensus estimate. Its shares were down 3 per cent in after-hours trading shortly after the announcement.
The world’s largest electric vehicle maker reported a 2 per cent rise in second-quarter revenue due to record growth in its energy storage business. Revenue rose to $25.5bn in the three months to the end of June, from $24.9bn in the same period last year, exceeding analysts’ expectations for $24.8bn.
Tesla’s gross margin, a closely watched financial metric, fell slightly to 18 per cent in the quarter, compared with 18.2 per cent in the same period last year and down from a peak of 29.1 per cent in the first quarter of 2022.
“Overall, our focus remains on company-wide cost reduction . . . growing our traditional hardware business and accelerating development of our AI enabled products and services,” Tesla told shareholders in its earnings announcement.
Tesla chief executive Elon Musk has focused work on an autonomous taxi service in recent months, prioritising the project over developing a new $25,000 affordable electric car, known unofficially as the Model 2.
“Though 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 on Tuesday.
Musk first outlined plans for a shared fleet of fully autonomous vehicles in his master plan for the company in 2016, saying they would allow Tesla owners to offset the cost of owning their vehicles.
Earlier this month, Tesla said it had delivered 443,956 electric cars between April and June, down 4.7 per cent from a year earlier, but rebounding from a disappointing 386,810 in the first quarter. The sales were enough to retain its position as the largest EV company ahead of China’s BYD.
Even by Musk’s standards, Tesla has had an eventful 2024. The billionaire entrepreneur won two contentious votes at the company’s annual meeting last month when shareholders reapproved his historic $56bn pay award — which had been struck down by a Delaware court — and backed a proposal to reincorporate the company in Texas.
He followed these victories by pledging to move his social media company X and SpaceX to Texas from California as part of a long-standing dispute with California governor Gavin Newsom.
Musk has also emerged as one of the most prominent Silicon Valley figures to back former president Donald Trump in November’s US election.
Tesla’s stock has fallen 18 per cent in the past 12 months and the company’s market capitalisation has almost halved from its peak of $1.2tn in November 2021.
