According to the EV giant’s second-quarter earnings report, Tesla’s profits and gross margins continue to decline.
According to The Verge, Tesla said it earned $1. 48 billion on a profit of $25. 5 billion. Compared to sales of $24. 9 billion in the second quarter of 2023, this represents a 2% year-over-year profit growth but a 45% reduction in revenue.
After years of steady decline, positive investors expected improvements, putting Tesla’s gross margins in the spotlight. The company’s once vaunted margins have fallen to their lowest point in six years due to widespread price cuts, a slowdown in demands and more financing.
The announcement follows this month’s better-than-expected delivery and production report, which sent the company’s stock higher. Even though Tesla is making and delivering fewer cars than it did a year ago (down 4. 76% and 14%, respectively), it still beat Wall Street’s forecasts, which foresaw much worse results.
Also read: Elon Musk threatens to deprive Tesla of AI and robotics unless he has a 25% stake in the company
The electric vehicle pioneer is reportedly delaying the arrival of its robotaxi until October to build more prototype cars. This data was revealed just weeks before Tesla released its second quarterly financial report.
Following CEO Elon Musk’s announcement on Aug. 8, Tesla’s market capitalization increased to more than $257 billion. Expectations caused an 11-day increase in value. But when Bloomberg News revealed Tesla’s robotaxi delay, the EV maker’s stock fell more than 8%. on Thursday.
Although privately, Tesla has not publicly admitted to the delay. Since Musk’s second “master plan” for the company eight years ago, the company has created a self-driving taxi service. An electric car that’s less expensive than the Model 3 sedan, this Musk just prioritized the task.
For more than a decade, Musk has been selling Tesla’s Full Self-Driving (FSD) product, charging thousands of dollars. Despite FSD claims to the contrary, motive power monitoring is still required for autonomous Teslas. As Tesla’s car sales have declined, Musk and his senior engineering team have become increasingly enthusiastic about FSD.
Elon Musk has long noted that Tesla homeowners make money from their self-driving vehicles for picking up and dropping off people. His company is testing a car-sharing feature on its app.
Tesla described the upcoming robotaxi in its earnings report as “purpose-built,” a word used in the autonomous vehicle industry to describe cars built from ground to ground to be autonomous and without pedals or wheels.
A few weeks after the Robotaxi event, Musk announced the layoff of roughly 10% of Tesla’s global workforce, underscoring the company’s autonomous approach.
Tesla disappointed speculators in falling value a few weeks earlier with a better-than-expected delivery report. According to S3 Partners, short traders lost $3. 5 billion as the company’s shares rose 17% in the two trading days following its second-quarter results. .
Tesla’s inventory is up 73% from its yearly low in April. According to CNBC, 97 million shares, or 3. 5% of Tesla’s float, are shorted and worth $22. 4 billion.
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