Tesla shares fell more than 12% in Wednesday trading after Elon Musk’s electric car maker reported its second straight quarterly loss and confirmed that the long-awaited launch of its robot taxi will be pushed back by two months to October.
The Austin, Texas-based company said its quarterly car revenue fell 7% to $19.9 billion as it faces growing competition from Tesla and also reported its lowest profit margin in more than five years after cutting prices in hopes of reviving falling demand.
“There were quite a few competing vehicles that came out that didn’t do very well, but they discounted these vehicles a lot,” Musk said on a conference call with analysts.
Margins fell despite Tesla laying off 14% of its global workforce this year – equivalent to more than 19,000 jobs. The company also saw an exodus of top executives after Musk gutted the team at the top of Tesla’s Supercharger unit.
The surprise lack of earnings sent the major stock indexes tumbling, with the Dow recently down 332 points to 40,025. The tech-heavy Nasdaq was recently down 3% at 17,460. Tesla shares recently fell 10.5% to $220.53.
Musk’s company has been hampered by slowing sales worldwide as well as growing competition from Chinese electric vehicle makers, including Warren Buffett-backed BYD.
At a conference call late Tuesday, Musk said Tesla will unveil its long-awaited robotaxi in early October, two months later than originally planned. He said the extra time would allow him to improve the design of the robotax and prepare some other items to unveil at the event.
Musk also said Tesla is on track to begin production of a new affordable car model in early 2025. This spring, he had said a launch later this year was a possibility.
Musk also said Tesla will delay a decision on whether to build a factory in Mexico until after the presidential election, noting that Trump has vowed to impose “heavy tariffs” on cars made in Mexico.
“It doesn’t make sense to invest heavily in Mexico if that’s going to be the case,” Musk said.
Tesla’s second-quarter net income fell 45% from a year earlier, after the company said on Tuesday it earned $1.48 billion from April to June, down from the $2.7 billion it made in the same period in 2023.
Despite the lack of earnings, Tesla bulls on Wall Street said they are playing the long game in waiting for the company to see its stock rise after it brings its Robotaxi technology to market.
“I’m still in the camp that they will offer these,” Gene Munster, managing partner at Deepwater Asset Management, told CNBC on Tuesday.
“They’re not going to deliver it on time, but at the end of the day, no other car company is doing what Tesla is doing, and I think it’s going to continue to go higher.”
Overall revenue for the quarter rose 2% to $25.5 billion, beating Wall Street estimates of $24.54 billion, according to FactSet.
That was due to revenue from the sale of regulatory credits, which help rivals meet emissions standards. Tesla made $890 million in sales in the quarter, triple what it did a year ago.
Excluding one-time items, Tesla earned 52 cents a share, below analysts’ expectations of 61 cents.
Tesla shares had fallen more than 40% at the start of the year, but have since recovered most of the losses.
Earlier this month Tesla said it sold 443,956 vehicles from April to June, down 4.8% from the 466,140 sold in the same period a year ago.
Although sales were better than the 436,000 analysts expected, they were still a sign of weakening demand for the company’s legacy product line.
For the first half of the year, Tesla has sold about 831,000 vehicles worldwide, far short of the more than 1.8 million for the full year that Musk had predicted.
Tesla said it posted record quarterly revenue “despite a difficult operating environment.”
The company’s energy storage business took in just over $3 billion in revenue, double the amount in the same period last year.
Munster said he was optimistic about the potential of Tesla’s self-driving software, as well as Optimus, the humanoid robot.
“There are other companies that have a $3 trillion market cap — I think Tesla could be in that league,” he said.
“Today is not the day to think about it, with these ugly margins, but I think the company is on track with where the world is going.”
By postal wire
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