Tesla's profits plunge amid price cuts and slower vehicle sales

Tesla reported a significant decline in second-quarter profits on Tuesday, attributing the drop to recent price cuts and increased spending on autonomous driving and other technologies.

Elon Musk's electric vehicle company reported profits of $1.5 billion, down 45 percent, on revenues of $25.5 billion, which were up two percent behind an increase in its energy generation and storage business, News.Az reports citing AFP.

Tesla's earnings per share missed analyst expectations, while revenues exceeded them.

The results are the latest in a rough patch for Musk's EV titan as it contends with rising competitive pressures that prompted a string of price cuts across leading markets.

Earlier this year, Tesla laid off 10 percent of its global staff, or about 14,000 workers, as part of a push to cull expenses to finance major new investments.

That reorganization also resulted in one-time expenses of $622 million in the second quarter due to severance and other costs, said Chief Financial Officer Vaibhav Taneja.

While vehicle sales fell compared to the year-ago period, they rose from the level in the first quarter as "overall consumer sentiment improved," Tesla said in its earnings powerpoint.

Although Tesla reaffirmed its expectation that vehicle volume growth may be "notably lower" than last year's, it said new, more affordable models are set to begin production in the first half of 2025.

Musk announced the accelerated timeframe in April, winning cheers from Wall Street which had sought fresh offerings.

However, on Tuesday Musk declined to offer new details, saying the topic would be covered in a product launch event.

Tesla said its iconoclastic Cybertruck vehicle remains on track for profitability by the end of 2024 as it ramps up production.

News.Az