US electric vehicle (EV) giant Tesla’s profit margins continued to fall as lower demand and falling prices hit the company.
Tesla reported net income of $1.5 billion (AU$2.27 billion) in the second quarter of 2024 (April-June), down sharply from $2.7 billion (AU$4.08 billion) in the same period last year, it announced this morning.
Based on ReutersThis is Tesla’s smallest net profit in more than five years.
Revenue, however, rose year-on-year from US$24.9 billion (A$37.64 billion) to US$25.5 billion (A$38.55 billion) in the second quarter, beating Wall Street analysts’ previous estimates.
Tesla previously said it expected to spend about $350 million to lay off about 10% of its workforce through the second quarter of 2024.
As reported earlier this monthSales fell 4.8 percent from April to June compared to the same period a year ago, marking the second quarter this year in which Tesla’s sales fell year-over-year.
In the first six months of the year, 830,766 Tesla vehicles were delivered globally, down 6.6% from the 889,015 vehicles delivered in the first half of 2023.
This comes despite Tesla offering steep discounts around the world in recent months, leading to Australian prices for its best-selling products. Model Y SUV and Model 3 Sedan prices have dropped by $9,500 and $7,000 respectively since March.
Reuters Tesla’s average profit per vehicle has fallen from nearly $US18,000 (AU$27,220) to about $US8,300 (AU$12,550) between early 2022 and mid-2024, according to a report.
However, the electric vehicle specialist said in January that it expected this to happen due to a renewed focus on new products.
“In 2024, our vehicle production growth rate may be significantly lower than the growth rate achieved in 2023, as our teams work to launch next-generation vehicles at Gigafactory Texas,” Tesla said in a statement earlier this year.
One of these new products is an autonomous robotaxi – expected to be called the Cybercab – which is expected to pair with a highly anticipated $US25,000 (AU$37,000) small EV.
While the future of the low-cost electric car remains unclear amid reports it has been cancelled, the launch of the robot taxi has been postponedOriginally scheduled for August 8, it has now been pushed back to October, according to Bloomberg.
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