- Tesla reported its fourth consecutive quarter of missed earnings estimates, with adjusted earnings at 52 cents per share.
- The unveiling of Tesla’s robotaxi prototypes has been postponed to October.
- Tesla’s stock fell by 11% following the earnings report and news of the delay, marking the largest decline since January.
Tesla Inc. has reported another quarter of disappointing profits and announced a delay in the highly anticipated unveiling of its autonomous taxis. The company’s volatile stock plunged the most in nearly six months following these announcements.
Adjusted earnings fell to 52 cents per share for the quarter ending in June, marking the fourth consecutive quarter of missed estimates. CEO Elon Musk confirmed that the event showcasing robotaxi prototypes would be postponed by about two months, now scheduled for October.
Tesla shares dropped 11% in intraday trading on Wednesday, the biggest decline since January 25. This drop comes despite a recent surge in the stock price, which had been recovering from a more than 40% decline earlier in the year.
The sentiment around Tesla had improved after a rough start to the year, with the company missing vehicle sales expectations by the largest margin ever in the first quarter. This led to significant layoffs, and Musk responded by emphasizing Tesla’s long-term focus on autonomous driving and artificial intelligence, which temporarily boosted the stock.
Musk reiterated the importance of autonomy for Tesla’s value, suggesting that those who disagree should sell their shares. The robotaxi unveiling, now set for October 10, will feature prototypes, with more affordable models potentially entering production in the first half of next year. Plans for a factory in Mexico are on hold until after the U.S. presidential election, and a humanoid robot, predicted by Musk to significantly increase Tesla’s valuation, won’t be available until 2026.
Investors are left in a holding pattern as Tesla’s vehicle output and sales decline. The company, the world’s largest seller of battery-electric vehicles, is significantly behind its pace of 1.8 million deliveries last year and expects notably lower volume growth in 2024.
Despite the profit slump, Tesla’s revenue reached a record $25.5 billion, exceeding expectations. This gain was largely driven by growth in the energy generation and storage business and $890 million in sales of regulatory credits to other carmakers.
Tesla’s automotive gross margin, excluding regulatory credits, fell to 14.6% in the second quarter from 16.4% in the first quarter. This decline reflects lower vehicle sales and prices, increased spending on AI and other projects, and restructuring costs from recent layoffs. The company incurred $583 million in employee termination expenses during the quarter.
Tesla plans to start manufacturing new, lower-cost cars at its Austin plant in the first half of next year. The plant will also produce both the robotaxi, which is not expected to be ready until 2026 or 2027, and the Optimus robot.
The decision on a new factory in Mexico has been delayed until after the U.S. election, with Musk citing potential tariffs under a Trump administration as a significant factor. Musk, who has endorsed Trump, downplayed the risk to Tesla’s business if Trump eliminates subsidies from the Inflation Reduction Act, suggesting it might slightly impact Tesla but could be more devastating for competitors.
Marc has been involved in the Stock Market Media Industry for the last +5 years. After obtaining a college degree in engineering in France, he moved to Canada, where he created Money,eh?, a personal finance website. He then contributed to building Guerilla Capital, a Capital Markets company and FirstPhase Capital where he was head of research. At10xAlerts, he writes articles and conducts interviews on many sectors, including breaking news technology, metals & mining markets.
