For the fourth consecutive quarter, Tesla, the electric vehicle manufacturer led by Elon Musk, missed Wall Street’s profit estimates for the second quarter of 2024, prolonging a difficult start to the year marked by slowing sales and massive layoffs across the company. Tesla announced on Tuesday adjusted earnings of 52 cents per share, below analysts’ estimates of 60 cents. The company’s revenue rose to $25.5 billion in the three months ending in June, almost $1 billion more than analysts had expected (around $24.6 billion). In the same period last year, it recorded $24.93 billion.
Net profits in the April-June period amounted to $1.48 billion, compared with $2.7 billion the previous year. In the first half of the year, net profits fell by 50% to $2.607 billion (about 2.401 billion euros), after $1.48 billion in the second half, 45% less than in the same period last year.
The company led by Elon Musk, a former Democratic supporter who last week pledged to give $45 million a month to Republican Donald Trump’s campaign, has said it remains focused on cost cutting and expects a “significantly lower” growth rate for 2024 amid “waves of growth.” Shares of the electric vehicle maker fell nearly 4% on the New York Stock Exchange after regular trading closed.
Still, second-quarter sales beat analysts’ expectations and sent its stock soaring. While deliveries were down from a year ago, Tesla improved sequentially from the first three months of the year. The surge in purchases was driven in part by a series of price cuts that squeezed the company’s margins. Its automotive gross margin, excluding regulatory credits — a metric closely watched by investors — reached 14.6% in the second quarter, up from 16.4% in the first.
The electric vehicle maker has opted to push cheaper financing options rather than big price cuts to customers, which analysts have said would extend the negative impact on margins into the coming quarters. Second-quarter deliveries also beat market expectations, helped by low-interest loan options, though they fell for a second straight quarter.
Despite the disasters caused by unmanned prototypes, investors have bought into Musk’s promises that robotaxis and fully autonomous humanoid robots are just around the corner, nearly reversing the share price’s decline so far this year. At one point in 2024, the stock was down more than 40% since the end of last year on weak Tesla vehicle sales. The company has invested billions of dollars in semiconductors to train AI models but has delayed the official unveiling of the robotaxi, a company source told Reuters.
The company expects to build more cars in the near term than it did in the second quarter. Its new Cybertruck is also on track to turn a profit by the end of the year, while plans for a lower-cost vehicle — the models on sale are not exactly affordable — are moving ahead, with production expected to begin in the first half of 2025.
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