Tesla’s Q2 profit drops 45% to $1.48 billion as sales fall despite price cuts and low-interest loans
DETROIT — Tesla’s Q2 net income fell 45% year over year as global company tram Sales fell despite falling prices and low interest rates.
The Austin, Texas-based company said Tuesday that it earned $1.48 billion from April to June, down from $2.7 billion in the same period in 2023. It was Tesla’s second straight quarter of declining net income.
Second-quarter revenue rose 2% to $25.5 billion, beating Wall Street estimates of $24.54 billion, according to FactSet. Excluding one-time items, Tesla earned 52 cents per share, below analysts’ expectations of 61 cents.
Earlier this month, Tesla said it sold 443,956 vehicles from April to June, down 4.8% from 466,140 sold in the same period last yearWhile sales were higher than the 436,000 analysts expected, it was still a sign that demand for the company’s older product line is weakening.
In the first half of the year, Tesla sold about 831,000 cars worldwide, far short of the more than 1.8 million cars it sold for the entire year that its CEO Elon Musk predicted.
The company’s widely watched gross profit margin, the percentage of revenue a company keeps after expenses, fell again to 18%. It was 18.2% a year ago and peaked at 29.1% in the first quarter of 2022.
Tesla said it posted record quarterly revenue “despite a difficult operating environment.” Its energy storage business generated more than $3 billion in revenue, double the same period last year.
Tesla shares fell 4% in after-hours trading Tuesday. The stock fell more than 40% at the start of the year but has since recovered most of its losses.
Revenue from regulatory credits purchased by other automakers cannot meet government requirements Emissions target of $890 million this quarter, double Tesla’s amount in most previous quarters.
The company reported $622 million in “restructuring and other” costs for the quarter as it laid off more than 10% of its workforce.
Tesla said in a note to investors that the company is in the midst of two major growth spurts, with the next coming through advances in self-driving car and new models. But the company still warned that its sales growth “could be significantly lower than the growth achieved in 2023.”
The company said it plans to new carincluding more affordable models, which are on track to start production in the first half of next year. Tesla has hinted at a smaller model priced around $25,000. These models will be built using some aspects of the current car and others from the next-generation platform.
The company said the average selling price for S modelsX, 3 and Y all decreased due to price reduction and financial incentives. It also shows that Electric Truck became the best-selling electric pickup truck in the United States during the quarter.
