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.

On July 20, the electric carmaker published the Tesla Q2 earnings report that revealed that the company had sold nearly 75% of its Bitcoin holdings. 

Did Tesla sell its Bitcoin?

The answer is a resounding Yes. And not just a small amount. From a $1.5 billion investment last year, Tesla converted nearly 75% into fiat currency, bringing its holdings down to $218 million. The Tesla earnings report revealed that as of June 30, the firm had only $218 million in digital assets and stated that the sale added $936 million in cash to its balance sheet. A surprising move indeed considering CEO Elon Musk reiterated in March that the automaker will continue to keep close to its heart.

In 2021, the automaker had gone as far as accepting Bitcoin as payment for new vehicles. However, it soon rolled back the offer over concerns arising from energy usage. At the time, Musk asked crypto enthusiasts to find another way to mine coins as the current method uses fossil fuel-generated electricity that is worsening the climate crisis.

In the first quarter of 2021, Tesla had sold 10% of its Bitcoin holdings when the currency’s market value shot up, netting it $101 million in profit. This year, the Bitcoin has fallen to its lowest since December 2020. 

During the Tesla earnings call, Musk addressed the furore over Tesla sells bitcoin. He explained that the decision to sell Bitcoin was taken as the Covid-19 situation in China seems uncertain and the company wanted to maximize its cash position. He added, “This should not be taken as some verdict on Bitcoin” as the company would be open to reinvesting in crypto in the future. He also clarified that no Dogecoin has been sold by the company. 

Tesla Q2 Earnings

Zachary Kirkhorn, Chief Financial Officer at Tesla, justified the move saying the company had to “offset by impairment charges on the remainder of our holdings, netting a $106 million cost to the P&L included within restructuring and other.”

Meanwhile, as Tesla sells Bitcoin grabbed headlines, the carmaker reported adjusted earnings of $2.27 per share on $16.93 billion in Tesla revenue in Q2 2022. According to Refinitiv, the electric carmaker generated $16.93 billion in revenue against the expected $17.1 billion. Its automotive gross margins declined to 27.9% in comparison to the 32.9% it generated last quarter. Record high inflation and competition for parts of electric vehicles have severely impacted the automaker.

On the Tesla Q2 earnings call, Musk revealed that the Tesla factory in Berlin managed to roll out 1,000 cars per week in the last week of June and the Texas plant to exceed the number in the coming months. When supply chain issues had disrupted production at the Berlin and Texas factories, Musk had called them “gigantic money furnaces.” On the other hand, Covid restrictions have forced the electric carmaker to temporarily hit the brakes on its manufacturing facility in China. It also increased its store and service center locations overall and reported a 19% year-on-year growth.

After adding the Bitcoin earnings, Tesla’s overall cash and cash equivalents hit $847 million during the quarter.  

Musk remains slightly optimistic about inflation and expects it to decline by the end of the year. However, he warned investors from taking his words as the gospel truth.

From “I would like to see Bitcoin succeed” last July to “The reason we sold a bunch of our Bitcoin holdings was that we were uncertain” this July, Musk’s views on Bitcoin have certainly undergone a sea change.

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