Tesla is looking back on another difficult quarter. The electric car manufacturer once again reported a significant decline in profits for the past three months in its business results presented after the stock market closed on Tuesday. The number of vehicles delivered also shrank.
The share price fell by more than 3 percent at times in after-hours trading. Tesla has had a turbulent year on the stock market. In the first few months there was a significant drop in price, but in the last four weeks the share has regained more than a third of its value. It currently costs about the same as at the beginning of the year.
Tesla is currently struggling with a number of challenges. Growth in the electric car business has slowed in some regions of the world, and Tesla is facing increased competition. In its home country of America, for example, the company is still the clear leader in the electric car business, but according to surveys by the market research group Cox Automotive, its market share fell below 50 percent for the first time in the second quarter.
At the beginning of July, Tesla reported that it had delivered 5 percent fewer cars in the past three months than in the same period last year. However, this decline was somewhat smaller than in the first quarter and also than analysts had expected, so it was seen as a sign of recovery. In its quarterly report, Tesla spoke of an improved mood among consumers with regard to the delivery figures, even if the environment remains difficult. Tesla is clearly showing weaknesses in the important Californian market in particular. An association of car dealers in the state has just reported that the number of Tesla vehicle registrations here plummeted by 24 percent in the second quarter.
“Between two major growth waves”
Tesla’s sales rose by 2 percent to $25.5 billion in the past three months, which was slightly better than analysts expected. However, the growth is mainly due to the power storage business, while pure car sales fell by 7 percent. Net profit fell by 45 percent to $1.5 billion, and earnings per share missed expectations. The operating profit margin, which analysts are closely watching, fell from 9.6 to 6.3 percent, but was again slightly higher than in the first quarter. Tesla has announced extensive savings, including the elimination of more than 10 percent of its jobs. The quarterly report now said that cost reductions remained a priority.
As in the previous two quarters, Tesla predicted “noticeably” lower growth in sales for the full year 2024, but did not provide a more precise figure. The company also stated again that it is “between two major waves of growth.” The next wave will be triggered by the introduction of new products and advances in autonomous driving.
Production of new models is set to begin in the first half of next year. These will include “more affordable” vehicles. A project involving autonomous driving, however, has been delayed. CEO Elon Musk had originally announced the presentation of robotaxis for August 8. However, this event has since been postponed. Musk has said he wants to take time for “an important design change.”
