Tesla shares took a hit after the electric vehicle maker posted a 45% drop in quarterly profit and warned its cost-cutting goals were on the way.
Inventory fell 8% in after-hours trading, leaving it on track for a roughly 50% year-to-date decline after it released its second-quarter results.
Chief Executive Officer Elon Musk, who cut 10% of the company’s workforce in late April in a bid to ease the strain on its bottom line, said the promised transition to more affordable models is on track for early 2025 but would prove more expensive than expected. .
The cost of AI projects, i. e. those aimed at generating humanoid robots, has also increased.
Net income for the April-June quarter was $1. 48 billion, down from $2. 7 billion in the same year last year.
Tesla’s profit margin at its lowest point in five years.
The increase in restructuring and progression spending coincided with a series of price cuts aimed at boosting sales.
The company’s vehicle deliveries have fallen for two consecutive quarters.
Tesla is facing a festival of development from Chinese manufacturers, who sell at deeply discounted prices, and sluggish demand due to a lack of new models.
Dan Coatsworth, an investment analyst at AJ Bell, said Tesla has missed its profit targets for four consecutive quarters.
“There is a lot of talk about robot taxis, humanoid robots and autonomous driving, which provides an exciting story for investors, but it does not allow us to grasp the fact that these are the potential riches of tomorrow and not of today. “
Thomas Monteiro, senior analyst at Investing. com, added: “Perhaps more than ever in the company’s recent history, Tesla investors want results; these will have to arrive temporarily, either for the humanoid robot or for the Robotaxi. “
Robotaxi’s assignment date in Europe and China has been postponed from August to October.
Tesla on Tuesday that “the timeline for the deployment of the Robotaxi depends on technological advancements and regulatory approval. “
Musk said in a conference call with investors, “I don’t think regulatory approval is going to be a limiting factor. “