Tesla Inc. fell short of Wall Street profit estimates in the second quarter, extending a rocky start to the year marked by slower sales and mass firings across the company.
It was the fourth consecutive miss for the electric vehicle maker, which on Tuesday reported adjusted earnings of 52 US cents (69.99 cents) a share, short of the average analyst estimate of 60 US cents per share.
Tesla’s revenue increased to US$25.5 billion, more than the US$24.6 billion analysts were expecting.
The Elon Musk-led company said its focus remains on cutting costs, and reiterated it sees a “notably lower” growth rate for 2024. It said its deliveries have picked up on better consumer sentiment and financing incentives, but that the next wave of growth will be spurred by advances in autonomy and the introduction of new products.
The EV maker’s shares fell 7% to US$29.04 at 6.09pm in New York, after regular trading hours. The stock was down about 1% this year at the close of trading Tuesday.
Investors have bought into Musk’s promises that fully autonomous robotaxis and humanoid robots are around the corner. At one point in 2024, shares were down more than 40% from the end of last year as a result of Tesla’s weaker vehicles sales.
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Musk said it would unveil its self-driving robotaxi, also known as the Cybercab, on Oct 10.
Initially, Tesla scheduled an event to unveil a vehicle prototype on Aug 8, but the company has delayed the reveal by at least two months after Musk ordered redesigns, Bloomberg reported earlier this month.
Tesla said Tuesday the robotaxi would rely on a new “unboxed” manufacturing method, which is more like building with Legos using modular assembly than a traditional production line.
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“I wanted to make some important changes that I think would improve the vehicle — the sort of robotaxi, the main thing that we’re going to show. And we’re also going to show off a couple of other things,” Musk told analysts and investors on Tesla’s conference call.
Musk said the robotaxi, like its humanoid Optimus robot, will be built at Tesla’s factory in Austin. A vehicle assembly facility it plans to build in Mexico remains paused and won’t be ramped up until at least after the US presidential election in November.
Musk said Republican candidate Donald Trump, who the billionaire CEO recently endorsed, has been talking about imposing tariffs on Mexico-made products.
“Trump has said that he’ll put in heavy tariffs on vehicles produced in Mexico, so it doesn’t make sense to invest a lot in Mexico if that is going to be the case,” Musk said.
Tesla’s revenue beat was helped along by regulatory credits, which the company sells to other carmakers seeking to comply with emissions mandates. The company recorded US$890 million in the quarter, more than double the tally in the first three months of the year.
The EV maker already reported second-quarter sales that surpassed analyst expectations and sent the stock soaring. Stronger purchases were partly spurred by a series of price cuts that cut into the company’s profits.
Its automotive gross margin, excluding regulatory credits — a closely watched metric by investors — fell to 14.6% in the second quarter, compared with 16.4% in the first quarter.
The company expects to make more cars in the current period than it did in the second quarter. It also said its new Cybertruck is on track to make a profit by the end of the year while plans for a lower-cost vehicle are moving ahead, with production expected to start in the first half of 2025. The cheaper cars will be available for sale around the same time.
“The whole story here is about what else is to come,” said Gene Munster, a managing partner at Deepwater Asset Management. “There are a lot of questions about the unboxed manufacturing strategy and what that means for the robotaxi, which means we probably won’t see a robotaxi until 2026 or 2027.”
