As per the electric vehicle giant's second-quarter earnings report, Tesla's net income and gross margins continue to sink.
Per the Verge, Tesla stated that it had made $1.48 billion on $25.5 billion in revenue. Compared to Q2 2023 sales of $24.9 billion, that is a 2 percent year-over-year growth in revenue but a 45 percent decrease in net income.
(Photo : ODD ANDERSEN/AFP via Getty Images)
Tesla CEO Elon Musk gets back into his Tesla after talking to media before visiting the construction site of the future US electric car giant Tesla, on September 03, 2020 in Gruenheide near Berlin.
After years of consistent reduction, optimistic investors expected to see improvements, putting Tesla's gross margins in the spotlight. The company's once-vaunted margins have dropped to their lowest level in six years as a result of widespread price reductions, a slowdown in demand, and more affordable financing.
The announcement follows earlier this month's better-than-expected delivery and production report, which caused the company's shares to surge. Even though Tesla is making and delivering fewer cars than it did a year ago (down 4.76 percent and 14%, respectively), it nevertheless exceeded Wall Street's forecasts, which were for much worse results.
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Tesla Robotaxi Delay
The EV pioneer is reportedly delaying the introduction of its robotaxi until October to build more car prototypes. This information was revealed just weeks before Tesla released its second-quarter financial report.
Following CEO Elon Musk's announcement of the August 8 date, Tesla's market capitalization increased by more than $257 billion. Expectations sparked an 11-day surge in prices. But when Bloomberg News disclosed Tesla's robotaxi delay, the EV manufacturer's stock dropped more than 8% on Thursday.
Although privately, Tesla did not publicly admit the delay. Since Musk's second "master plan" for the company eight years ago, it has been creating an autonomous taxi service. A less expensive electric car than the Model 3 sedan, this project was just given priority by Musk.
For more than ten years, Musk has promoted Tesla's Full Self-Driving (FSD) product, charging thousands of dollars. Despite FSD's assertions to the contrary, driver supervision is still necessary for autonomous Teslas. Since Tesla's car sales have decreased, Musk and his senior engineering team have grown more excited about FSD.
Elon Musk has long observed Tesla proprietors making money by using their self-driving cars to pick up and drop off individuals. His business is testing out a ride-hailing function on its app.
Tesla described the next robotaxi in its earnings report as "purpose-built," a word used in the autonomous vehicle industry to describe cars built from the ground up to be self-driving and devoid of pedals and steering wheels.
Weeks after the Robotaxi event, Musk announced the termination of almost 10% of Tesla's global workforce, emphasizing the company's autonomous focus.
Tesla Disappoints
Tesla disappointed price-fall speculators a few weeks earlier with a better-than-expected delivery report. According to S3 Partners, short sellers lost $3.5 billion when the company's shares increased 17% during the two trading days following the release of the second quarter results.
Tesla's stock increased 73% from its annual low in April. According to CNBC, 97 million shares, or 3.5% of Tesla's float, are short and are worth $22.4 billion.
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