Tesla reassures investors by reiterating for new affordable EV to launch by first half of 2025.
While Tesla is still to be the juggernaut in the EV space, the American all-electric marque is not to exactly be in the pinkest of financial health these days. Such is as after having just reported its biggest-ever sales miss in the previous quarter, the automaker has since followed that up this quarter by posting its lowest quarterly profit margin in five years.
Tesla recorded automotive gross margin excluding regulatory credits of 14.65% in the second quarter of 2024, compared with investor estimates of 16.29%. This is also to be the fourth straight quarter in which the electric automaker has seen its profits decline.
Its adjusted earnings of 52 cents per share had missed the Wall Street consensus of 62 cents as well, as calculated by LSEG. The company had however reported a revenue from $24.93 billion (RM 116.4 billion) a year earlier to $25.50 billion (RM 119 billion) for the three months ended June 2024, but this comes amid Tesla’s sales of regulatory credits nearly tripling to $890 million (RM 4.15 billion) in this prior second quarter from a year earlier.
In terms of vehicle sales now, Tesla reported that worldwide deliveries rose from the level in the first quarter of this year. The world’s largest seller of battery-powered cars nevertheless apparently still is far off the pace of the 1.8 million cars it sold last year, and warned for a second time during its financial results announcement that it expects to see a notably lower growth rate in 2024.
Share prices of the EV marque fell by some 12% after this most recent financial announcement, eating into the stock’s recent rally but not fully erasing it. It was however still to be the biggest one-day percentage drop in its stock since 2020, and it left Tesla’s market capitalisation at just under $700 billion (RM 3.3 trillion), down from over $1 trillion (RM 4.67 trillion) in 2021.
This most recent quarterly financial results are to be the latest in a rough patch for the electric automaker, as it contends with rising competitive pressures that prompted a string of price cuts across leading markets. The decrease in operating margins this past quarter is also partly attributed to an increase in its operating expenditures on other projects, as well as restructuring charges from sweeping job cuts.
With it having reported its biggest-ever sales miss in the first quarter of this year, Tesla responded by laying off 10% of its global staff as part of a push to cull expenses to finance major new investments. These major investments apparently includes the launch of a number of new models, for which the company has reaffirmed will include a lower-cost EV that is slated to enter production by the first half of next year.
The EV marque has also since announced that it intends to reorient itself from being an automaker, into a technology company focused on artificial intelligence (AI) and self-driving. The company has however already postponed its much-anticipated robotaxi event planned for August until October, thereby continuing on the tradition of Tesla pushing back the time frame for its self-driving technology (for which it had previously first claimed to be capable of achieving this breakthrough by 2018).
Just to end on a more Malaysian note too, there have been increasingly frequent sightings of Tesla offering deals and running roadshows to hawk its products. Something that is not normally practiced by a company that is experiencing booming sales…
