New York, United States – Tesla reported a hefty drop in second-quarter profits Tuesday due to the effect of price cuts while spending aggressively on artificial intelligence and other technology.
Elon Musk’s electric vehicle company reported profits of $1.5 billion, down 45 percent, on revenues of $25.5 billion, which were up two percent behind an increase in its energy generation and storage business.
Tesla’s earnings per share missed analyst expectations, while revenues exceeded them.
The results are the latest in a rough patch for Musk’s electric vehicle titan as it contends with rising competitive pressures that prompted a string of price cuts across leading markets.
Earlier this year, Tesla laid off 10 percent of its global staff, or about 14,000 workers, as part of a push to cull expenses to finance major new investments.
While overall vehicle sales fell compared to the year-ago period, they rose from the level in the first quarter as “overall consumer sentiment improved,” Tesla said in its earnings powerpoint.
While Tesla reaffirmed its expectation that vehicle volume growth may be “notably lower” than last year’s, it said new, more affordable models are set to begin production in the first half of 2025.
Musk announced the accelerated timeframe in April, winning cheers from Wall Street which had sought fresh offerings.
Tesla vowed to press on with technological pushes in artificial intelligence and autonomous driving.
Earlier this month, Tesla postponed a much-anticipated robotaxi event planned for August until October.
While the “timing of Robotaxi deployment depends on technological advancement and regulatory approval, we are working vigorously on this opportunity given the outsized potential value,” Tesla said.
The outspoken Musk has a history of making bold predictions about the prospects for autonomous vehicles, saying conventional autos will one day be as obsolete as a horse and buggy.
But Musk has fallen short of projections about the timeframe for self-driving technology, after previously predicting the company would achieve the breakthrough by 2018.
The results come as Musk has lately deepened his commitment to electoral politics, coming out loudly for Donald Trump in the 2024 presidential election despite the former president’s longstanding denial of climate change — which has been a professed Musk priority.
Musk formally endorsed Trump on July 13 shortly after an unsuccessful assassination attempt on the Republican presidential nominee.
Musk has agreed to donate $45 million monthly to ‘America PAC,’ a fund focused on electing Trump, starting in July, the Wall Street Journal reported earlier this month.
Heading into Tuesday’s earnings announcement, Tesla shares were essentially flat for 2024.
Shares of Tesla fell 3.0 percent in after-hours trading.
