Tesla shares dropped sharply on Wednesday after the electric vehicle maker reported second-quarter earnings that missed expectations. The company’s automotive revenue declined 7% year-on-year to $19.9 billion, while its adjusted earnings margin also fell.
Q2 2024 Shareholder Update → https://t.co/sXBSeLiJIj
— Highlights
We continued to expand our vehicle lineup globally, with new trims of Model 3 & Y as well as new S3XY paint options.
Vehicle
– Refreshed Model 3 ramp continued successfully– We also continue to qualify more… pic.twitter.com/2UuLhlmjvD
— Tesla (@Tesla) July 23, 2024
Tesla has been forced to slash prices globally and offer discounts amid slowing sales and rising competition, especially in China.
Should Tesla invest $5B into @xAI, assuming the valuation is set by several credible outside investors?
(Board approval & shareholder vote are needed, so this is just to test the waters)
— Elon Musk (@elonmusk) July 24, 2024
The company’s stock is nearly 1% lower this year to date, while the broader market has risen more than 16%. Tesla remains the top seller of electric vehicles in the U.S. but is losing market share to a growing number of rivals. This is partially due to its aging lineup of sedans and SUVs and the impact of CEO Elon Musk’s political commentary.
Just a reminder of the Tesla Q2 2024 Financial Results and Q&A Webcast
When: Tuesday, July 23, 2024
Time: 4:30 p.m. Central Time / 5:30 p.m. Eastern TimeQ2 2024 Update: https://t.co/W5TKiGSNNf
Webcast: https://t.co/W5TKiGSNNf (live and replay) pic.twitter.com/ejhFxJgtsd— Joe Tegtmeyer 🚀 🤠🛸😎 (@JoeTegtmeyer) July 22, 2024
On the earnings call, Musk said Tesla is on track to deliver a new “affordable” car in the first half of next year. He also focused heavily on the company’s plans for robotaxis, envisioning a world where Tesla owners can authorize their vehicles to be used as part of an Uber-style ride-hailing service with autonomous driving.
Tesla earnings miss impacts stock
However, Musk has a history of promising timelines and not delivering. He pushed back the date of the company’s robotaxi event to October, after previously saying it would take place in August. Several analysts weighed in on Tesla’s earnings miss.
Cantor Fitzgerald downgraded the stock to neutral, while Goldman Sachs and Citigroup adjusted their price targets lower. UBS analyst Joseph Spak pointed out stress on Tesla’s automotive business and maintained a sell rating. Tesla’s quarterly revenue growth was aided by surging regulatory credits, which reached a record $890 million.
However, the auto gross margins, excluding credits and leases, missed expectations at 14.6%. Despite the setbacks, Tesla reaffirmed its long-term growth in its energy storage business outpacing its automotive segment. Investors remain cautious as they await further developments in the EV market and the company’s strategic moves.
April Isaacs is a news contributor for DevX.com She is long-term, self-proclaimed nerd. She loves all things tech and computers and still has her first Dreamcast system. It is lovingly named Joni, after Joni Mitchell.
