The company said it was on track to produce new vehicles, including more affordable models, in the first half of 2025, although the models will result in achieving less cost reduction than previously expected.

Tesla’s quarterly results

Tesla earnings per share: 52 cents adjusted vs 62 cents expected, per LSEG consensus estimates.

Tesla revenue: $25.50 billion vs. $24.77 billion expected by LSEG

Revenue increased 2% from $24.93 billion a year earlier, Tesla said in an investor deck on Tuesday. But automotive revenue dropped 7% to $19.9 billion from $21.27 billion in the same quarter a year ago. Auto revenue included regulatory credits of $890 million, more than triple the figure from last year.

The company said it “recognized record regulatory credit revenues in Q2,” pointing to the fact that other automakers are “still behind on meeting emissions requirements.”

After a rocky first half of the year that saw Tesla cut more than 10% of headcount, the company reported better-than-expected deliveries for the Q2 earlier this month. However, deliveries were still down from a year earlier for a second straight period.

Tesla’s self-driving technology

Musk has been promising since about 2016 that Tesla will turn its existing EVs into self-driving vehicles with software updates, which the company calls Full Self-Driving. Tesla is separately working on a CyberCab dedicated robotaxi.

On Tuesday’s call, Musk said he doesn’t foresee regulatory hurdles to rolling out Tesla’s self-driving technology to a broad market in the U.S. and beyond.

He also referred to Waymo’s commercial robotaxi services as “limited” and “fragile.” Tesla’s system, he said, should be able to work anywhere in the world, not just in a geographically-limited area.

Competition for Tesla

Tesla remains the top seller of electric vehicles in the U.S. by far, but is losing market share to a growing number of rivals due in part to its aging lineup of sedans and SUVs and the impact of Musk’s incendiary and political commentary.

During the quarter, Tesla offered discounts and other incentives, including subsidized financing deals, in China and the U.S. to spur demand. Those deals hit the company’s profitability, with its adjusted earnings margin falling to 14.4% from 18.7% in the Q2 of 2023.

Musk told analysts on a conference call that new competitors “have discounted their EVs very substantially, which has made it a bit more difficult for Tesla.”

Rival automakers saw a 33% year-over-year jump in fully electric vehicle sales in the U.S. during the first half of 2024, while Tesla sales dropped by 9.6% in that time frame, as per report.

Tesla’s net income

Net income at Tesla declined 45% to $1.48 billion, or 42 cents a share, in the Q2 from $2.7 billion, or 78 cents a share, a year earlier.

During the Q2, Tesla increased production of its newest model EV, Cybertruck which the company now says is “on track to achieve profitability by end of year.”

Capital expenditures in the quarter increased 10% from a year ago to $2.27 billion. The company said it incurred $600 million in expenses for artificial intelligence infrastructure.

Tesla’s Robotaxi

Musk over the years has promoted Tesla as a technology company, most recently saying self-driving technology was key. Tesla said on Tuesday the “timing of Robotaxi deployment depends on technological advancement and regulatory approval.” But Musk said during the conference call, “I don’t think regulatory approval will be a limiting factor.”

Musk said Tesla has delayed the unveiling of its Robotaxi product to Oct. 10 from Aug. 8 to make some important changes to the robotaxi.

Tesla said Cybertruck production “remains on track to achieve profitability by end of year.”

Tesla said it has started validation of its first prototype Cybertruck vehicles using its breakthrough battery manufacturing technology.

Tesla’s stock update

Shares of Tesla have surged more than 30% since June 13, when shareholders voted to approve Musk’s $56 billion pay package that was invalidated by a Delaware court in January. Its shares were also boosted by hopes for robotaxis. Tesla shares are down about 0.5% for the year at Tuesday’s close, while the Nasdaq is up about 20% over that stretch. Tesla share price was down more than 8% in extended trading closing at $227.23.

The post Tesla’s Q2 Earnings: Low Profit Margin, Sales Decline, Stock Falls by 8% appeared first on Industry Leaders Magazine.

It was the first time Tesla’s cars have been made eligible for government purchases in China, the Paper added.

China government purchases Tesla car

China’s eastern Jiangsu provincial government published 56 batches of new energy vehicle procurements for use as service cars by party, government and public organizations in a government statement on June 6.

Elon Musk’s EV group is the only foreign-owned car manufacturer on the list published by the eastern province of Jiangsu. The company was among the 10 brands on the approved procurement list. The list included Geely-owned Volvo Cars, SAIC-owned MG and state-owned Changan.

Apart from the Model Y made in Tesla’s Shanghai factory and Volvo Cars’ XC40, the other 54 batches were all Chinese-branded EVs and hybrids. Volvo Cars is owned by Chinese automaker Zhejiang Geely Holding Group.

Removal of restriction for Tesla cars

Neither the government of China nor the media specified the number of Model Y cars of Tesla that the Jiangsu provincial government could purchase. Tesla’s cars were banned from entering some government and military compounds in China.

The restrictions were removed after it won an endorsement from the country’s top auto industry association that said in April the data collection by Tesla fleets in China was compliant.

Elon Musk’s intervention

The demand for Chinese cars abroad is overshadowed by the prospect of tariffs and intense domestic competition. Tesla’s deliveries of China-made vehicles fell 9% in the first half compared to the same time in 2023.

Tesla CEO Elon Musk’s trip to China in late April to meet Premier Li Qiang, appears to have paid off.

China has increased its support for Tesla, which plans to build a data training center and roll out its Full Self Driving software in the country this year. This despite ongoing tensions with the U.S. over tech rivalry.

Importance of approval for Tesla

Jiangsu’s announcement to include Tesla for Chinese government comes at a critical point for Tesla in China. As this accounts for 60% of global EV sales. China is becoming increasingly important as the appetite for battery-run cars has been on the wane in the U.S. and Europe.

Tesla is facing rising competition from local brands in China, its single-largest market outside of the US. 

“China is hugely important for Tesla and has been for a long time, so this is just another positive,” said Philippe Houchois, an analyst with the bank.

The announcement to include Tesla’s Model Y SUV is despite heightening trade tensions between China and the west. “[Our] product quality has been acknowledged by the local government,” Tesla China said in a statement. 

The government where Tesla’s gigafactory is located in Shanghai, is testing 10 Tesla cars. They are equipped with the autonomous driving software on some streets in the city, as per state media.

Tesla share price

Tesla share price today at closing was $246.39 up by 6.54%

The post Tesla Gains First-Time Approval for Government Purchases in China appeared first on Industry Leaders Magazine.

Tesla Q2 deliveries were higher-than-expected “greatly assuages concerns regarding softening EV demand,” CFRA Research analyst Garrett Nelson said.

Tesla stock price surge

As per Garrett Nelson, the Tesla stock price continues to ride a wave of positive momentum following its annual meeting in mid-June in which shareholders re-approved Elon Musk’s 2018 compensation plan.

Many feel that the Tesla shares rally and rebound and Q2 delivery figures were viewed by some analysts and investors as a sign of possible improvement ahead of its robotaxi reveal on Aug. 8. There are others who are worried that the EV maker is exhausting its “bag of tricks,” with Tesla going for price cuts and higher incentives.

Rise in Tesla’s Q2 deliveries

Tesla handed over 443,956 vehicles in the three months to June 30, 4.8% lower than a year earlier and up 14.8% from the preceding quarter.

Wall Street on average had expected the company to deliver 438,019 vehicles, according to 12 analysts polled by LSEG. Tesla delivered 422,405 Model 3 and Model Ys, and 21,551 units of other models, which include the Model S sedan, Cybertruck and Model X premium SUV. It produced 410,831 vehicles during the April-June period.

Tesla has been slow to refresh its car lineup at a time when rivals, especially in China, have come up with new affordable models, and as high interest rates dampen demand.

Investors supporting Musk’s pay package

Despite headwinds for its mainstay car business, investors overwhelmingly voted in favor of Musk’s record $56 billion pay package at the meeting. Board chair Robyn Denholm said prior to the vote that reinstating the pay package was necessary for “retaining Elon’s attention and motivating him.”

Musk said in a social media posting that Tuesday’s rally of Tesla stock is “small relative to vehicle autonomy and Optimus,” referring to his company’s self-driving cars and humanoid robots that he has said will significantly boost the EV maker’s market value once they become reality.

Tesla’s sales in China and U.S.

Tesla does not provide regional breakdown of sales, but some analysts said better-than-expected sales in China and the U.S. may have helped Tesla deliver stronger-than-expected results. In April, Tesla made another round of price cuts in key markets such as the United States, China and Europe.

Tesla offered loans with interest rates of zero or near zero percent on car purchases in China and the U.S. In the U.S. it heavily promoted its leasing plans, which make its vehicles eligible for $7,500 federal credits.

Chinese automakers said their sales grew by double-percentage points during the second quarter. BYD said its second-quarter sales of battery electric vehicles jumped 21% to 426,039.

Tesla’s China sales, which include domestic sales and exports to Europe and other countries, fell 17% in the second quarter from a year earlier. The company gave no breakdown on its China sales.

Tesla’s outlook

This marks the first time Tesla posted a year-on-year sales fall for a second consecutive quarter. Musk has said he expects the company to increase deliveries in 2024 from a year earlier. However, Wall Street largely expects a drop due to poor sentiment around EVs.

Tesla said in January that it expected “notably lower” growth in deliveries this year and dropped its goal of delivering 20 million vehicles a year by 2030.

Musk has promised to focus Tesla instead on self-driving cars, but some investors and experts remain skeptical that Tesla can perfect it anytime soon.

Tesla stock update

Tesla share was up 7.7% at a price of $226.11 on Tuesday afternoon. The stock have declined about 9% so far this year.

The post Tesla Share Price Rallies 10% on Strong Q2 Delivery Report appeared first on Industry Leaders Magazine.

As per the company’s official statement, Tesla delivered 308600 vehicles in Q4. In 2021, the carmaker made a total of 936172 deliveries. The official statement on deliveries had a huge impact on markets and Tesla shares jumped nearly 13.5 percent.

Despite being plagued by supply chain issues, this level of demand speaks to an increasing customer interest in electric vehicles and sustainability.

When the report was announced on Sunday, it reinforced Tesla’s commitment to work through a range of bottlenecks to achieve customer dissatisfaction, especially in a year when chip shortages threatened the auto space. The company worked on increasing production in China, which enabled it to deliver across Europe and parts of Asia. Trade pundits at Wall Street were left scratching their heads after the announcement as they had missed the mark by about 16% for predictions on Q4 deliveries. This also impacts investment plans as they missed out on betting against Tesla share prices.

Tesla’s star has continued to rise as investors witness first-hand the company’s struggle to make a mark in the EV segment while aggressively working on improving technology. Even when they were battered by the Pandemic, Tesla delivered 499550 vehicles in 2020. However, in 2021, they delivered a jaw-dropping 936172 vehicles, which is almost double the number from the previous year.

Problems

In January 2019, Elon Musk had issued an open letter informing employees that they will reduce headcount by 7% and the company must reduce vehicle prices to avoid bankruptcy. To engineer such a turnaround from the brink of devastation, in the middle of a raging Pandemic, speaks to capable leadership and continuous innovation. It is also noteworthy to consider the fact that Tesla had increased the price of vehicles to offset increasing production costs.

The carmaker has also had quite a few run-ins with the National Highway Traffic Safety Administration (NHTSA). These incidents had a major impact on Tesla stock price and reliability. The carmaker struggled to win back customer trust amid reports of various accidents and investigations.

Additionally, in July 2021, Musk announced that Tesla was working to revamp its software to enable the usage of computer chips that were easily available, compared to the earlier ones that were in short supply.

In other Tesla news, the company incurred the wrath of activists after opening a showroom in Xinjiang, China, where authorities are accused of abusing Muslim minorities. However, the company continues to masterfully tackle every curveball that comes their way. Tesla’s market capitalization has also risen considerably in recent months. It has a $1.2 trillion valuation, which some industry experts believe does not justify its performance. But despite all these factors, there is no ignoring the fact that Tesla has managed to capture the EV market and the world’s attention. The Tesla share price is a testament to this fact.

Resilience

Tesla share prices received an unexpected boost after rental car company Hertz announced that it has ordered 100,000 electric vehicles in October 2021. Share prices for both companies rallied after the press release.

In October 2021, the billionaire CEO had boldly declared that Tesla will sustain its growth rate of over 50% in the near future. Only time will tell how this statement will age. This year, Tesla inched closer than ever before towards achieving its goal of selling one million units in a year. If we combine that with its record-breaking deliveries across the previous four quarters, the future appears promising. As it increases production and cleverly works around bottlenecks, the company looks poised for growth and disruption. Tesla shares have time and again been bolstered by the automaker’s robust performance that continues to defy pessimistic expectations.

CEO Musk shared the delivery news with the tweet “Great work by Tesla team worldwide” with a link to the official announcement. We can only hope that the energy-conscious company continues to live up to the statement and that Tesla shares continue to scale greater heights.

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