Tesla has announced a significant decline in second-quarter profits as a result of pricing cuts, despite aggressive expenditure on artificial intelligence and other technology.
Elon Musk’s electric vehicle company posted profits of $1.5 billion, down 45 percent, on revenues of $25.5 billion, up 2% due to a rise in its energy generating and storage business.
Tesla’s earnings per share fell short of analysts’ estimates, but its revenues exceeded them.
The figures are the latest in a line of price drops across key regions as Musk’s electric vehicle titan battles mounting competitive challenges.
Earlier this year, Tesla laid off 10% of its global workforce, representing over 14,000 workers, as part of a cost-cutting effort to fund big new investments.
While overall vehicle sales were down from the previous year, they grew from the first quarter as “overall consumer sentiment improved,” Tesla claimed in its quarterly presentation.
Tesla reiterated its assumption that car volume growth will be “significantly lower” than last year, it also announced that new, more inexpensive models will enter production in the first half of 2025.
Tesla has vowed to press on with technological pushes in artificial intelligence and autonomous driving.
Earlier this month, Tesla postponed a much-anticipated robotaxi event planned for August until October.
While the “timing of Robotaxi deployment depends on technological advancement and regulatory approval, we are working vigorously on this opportunity given the outsized potential value,” Tesla said.
Heading into Tuesday’s earnings announcement, Tesla shares were essentially flat for 2024.
Shares of Tesla fell 3.0 percent in after-hours trading.
