Tesla reported a 2% rise in revenue to $24.93 billion compared to the previous year, as stated in an investor presentation on Tuesday. However, automotive revenue decreased by 7% to $19.9 billion from $21.27 billion in the corresponding quarter last year.
Earnings Miss Wall Street Estimates
Tesla’s earnings for the second quarter of 2024 fell short of Wall Street’s expectations. The company’s adjusted earnings per share were 52 cents, missing the expected 62 cents per share, according to LSEG consensus estimates. This led to an 8% drop in Tesla’s shares in extended trading.
Revenue Slightly Exceeds Expectations
Despite the earnings miss, Tesla reported revenue of $25.50 billion, slightly exceeding the $24.77 billion expected by analysts. This represents a 2% increase from the $24.93 billion reported in the same period last year. However, automotive revenue, a crucial segment for Tesla, fell by 7% to $19.9 billion from $21.27 billion a year ago.
Impact of Discounts and Incentives
During the quarter, Tesla implemented discounts and other incentives, including subsidized financing deals, in China and the U.S. to boost demand. These efforts, while increasing sales, impacted profitability. The company’s adjusted earnings margin dropped to 14.4% from 18.7% in the second quarter of 2023.
Comparison with Rivals
While Tesla faced challenges, rival automakers experienced growth in the electric vehicle market. According to Cox Automotive and InsideEVs, fully electric vehicle sales in the U.S. jumped 33% year-over-year in the first half of 2024. In contrast, Tesla’s sales dropped by 9.6% during the same period.
Quarterly Deliveries
Tesla’s quarterly deliveries were better than expected earlier this month. However, they were still down from the previous year for the second consecutive quarter. The company had to adjust its workforce, cutting more than 10% of its headcount earlier this year.
Conclusion
Tesla’s financial performance in the second quarter of 2024 highlights the challenges the company faces. While revenue saw a slight increase, the drop in automotive revenue and earnings per share below expectations indicate a tough market environment. The impact of discounts and increased competition from rival automakers further underscores the hurdles ahead for Tesla.
