Tesla's (TSLA.O) second-quarter profit fell more than 40% year-on-year, marking the second consecutive quarter of decline. The weaker-than-expected financial report caused the stock to plummet 8% after the U.S. stock market closed on Tuesday.

The latest financial report shows that Tesla’s Q2 revenue in 2024 was US$25.5 billion, with a gross profit margin of 18% in the second quarter; adjusted earnings per share were US$0.52. Despite promotional measures such as price cuts and low-interest financing, as well as cost-saving and expenditure-saving measures such as layoffs, Tesla's sales have still declined significantly, resulting in net profit falling 45% to US$1.48 billion from the same period last year.

The financial report also showed that in the second quarter, its automotive business had total revenue of US$19.878 billion, power generation and energy storage business had revenue of US$3.014 billion, services and other businesses had revenue of US$2.608 billion, automobile sales business had revenue of US$18.53 billion, and automobile rental business had revenue of US$458 million, all of which were lower than the same period last year.

The April-June period marked the second straight quarter of year-over-year sales declines for the company, its first consecutive quarter of declining sales ever. The only quarter in which Tesla’s sales fell since going public was early in the pandemic, when stay-at-home orders forced its factories to close.

Tesla did not give a new full-year sales target but warned that "our vehicle inventory growth rate in 2024 is likely to be significantly lower than the growth rate in 2023." Tesla's profitability has been hit by lower sales and buyers paying less for its core models. Musk attributed the sluggish performance in part to a price war that broke out last year when competitors launched their own electric vehicle products. "A number of competitors have vehicles that have entered the market that have not performed well, but they have discounted them heavily," Musk said on a conference call with analysts.

A bright spot in Tesla’s earnings report was the record number of regulatory credits it sold to other automakers that failed to meet carbon emissions requirements. Revenue from those credits, essentially pure profit, rose to $890 million in the second quarter, more than tripling from a year earlier.

In the subsequent earnings call, Musk was also asked about Tesla's aging model lineup, the delayed release of Robotaxi, and concerns about the supply of artificial intelligence chips.

The Tesla CEO confirmed that Tesla's Robotaxi has been delayed until October 10. Tesla said in its earnings report that the company still faces regulatory and technical obstacles before providing a robot-driven service without a driver. Musk said he is optimistic that Tesla's autonomous driving will be approved by regulators and he would be "shocked" if the first Robotaxi drive is not achieved next year, but he could not give a clear timeline.

Musk also gave vague answers to questions about Tesla's updated Roadster and next-generation low-cost car. Musk said the company will launch a cheaper electric car in the first half of 2025, but did not provide any further details about the product. He said the model is expected to start production in the first half of 2025. However, this spring, he said production could start as early as the end of this year. When asked whether Tesla would sell stripped-down versions of existing cars to lower prices, Musk said he did not want to hurt demand for Tesla's existing models by elaborating on the company's future plans.

Musk is trying to steer the company through a turbulent period as he deals with challenges in its core auto business while increasing bets on self-driving cars and artificial intelligence. He has repeatedly urged investors to view Tesla as more than just a carmaker and said the new ventures could boost the company's market value to more than $30 trillion.

Separately, Musk also noted that Tesla's plans to build an assembly plant in Mexico have been put on hold. Those plans were announced more than a year ago, but Musk said they are now on hold until after the presidential election because of Republican candidate Trump's threats to impose tariffs on cars imported from Mexico.

Dan Coatsworth, an investment analyst at AJ Bell, said Tesla has now missed its earnings targets for four consecutive quarters. "There has been a lot of talk about robotaxis, humanoid robots and autonomous driving, which provides an exciting narrative for investors, but without losing sight of the fact that these are potential fortunes for tomorrow, not today."

Tesla shares fell more than 8% in after-hours trading on Tuesday. As of Tuesday's close, the stock was down about 1% so far this year, after falling as much as 44% earlier this year. Tesla shares have surged more than 30% since June 13, when shareholders finally voted to approve Musk's $56 billion pay package, and hopes for robotaxis have also boosted its stock price.

But David Wagner, a Tesla investor and equity and portfolio manager at Aptus Capital Advisors, said: "Elon is great at dangling carrots in front of investors, but new ideas tend to be long-term vision and poor execution."

Article forwarded from: Jinshi Data