Tesla Reports Profit Drop on Price Cuts, Lower Vehicle Sales

AFP/APP

New York: Tesla reported a substantial drop in second-quarter profits due to price cuts and significant spending on artificial intelligence and other technologies.

The company reported profits of $1.5 billion, a 45 percent decrease, on revenues of $25.5 billion, which were up 2 percent, driven by growth in its energy generation and storage business. Tesla’s earnings per share fell short of analyst expectations, although revenues exceeded them.

The results reflect a challenging period for Tesla as it faces rising competitive pressures and has implemented price cuts in key markets. The company also laid off 10 percent of its global workforce earlier this year to reduce expenses.

Vehicle sales fell compared to the previous year but improved from the first quarter. Tesla plans to produce more affordable models in the first half of 2025 and continues to invest in AI and autonomous driving technologies.

The anticipated robotaxi event, initially planned for August, has been postponed until October. Despite previous delays in self-driving technology, Musk remains optimistic about the future of autonomous vehicles.

In addition to his business ventures, Elon Musk has recently endorsed Donald Trump for the 2024 presidential election and pledged substantial financial support to ‘America PAC’ to support Trump’s campaign. Tesla shares fell 3.0 percent in after-hours trading following the earnings announcement.