The stock of Tesla (TSLA) is down 8% after the electric vehicle manufacturer reported disappointing second-quarter financial results due to a continued slump in sales.
The company reported earnings per share (EPS) of $0.52 U.S. versus $0.62 U.S. that was expected among analysts.
Revenue in the April through June period totaled $25.50 billion U.S., which was slightly ahead of Wall Street forecasts of $24.77 billion U.S. Total sales were up 2% from a year earlier.
However, Tesla reported that its revenue generated from electric vehicle sales declined 7% year-over-year to $19.90 billion U.S.
The company’s automotive revenue included regulatory credits of $890 million U.S., more than triple the figure from a year ago. Its profit margin fell to 14.4% from 18.7% in the second quarter of 2023.
Tesla continues to struggle with declining sales and rising competition, especially in China, its second biggest market.
As a result, Tesla has had to lower prices and offer discounts on its vehicles, which have hurt the company’s finances and profit margins. It also cut more than 10% of its workforce earlier this year.
While Tesla remains the top seller of electric vehicles in the U.S., it is losing ground to competitors such as Ford Motor Co. (F) and General Motors (GM).
Earlier this year, Tesla’s share of the U.S. electric vehicle market fell below 50% for the first time, a downward trend that analysts say will be hard to reverse as competition intensifies.
Rival automakers saw a 33% year-over-year increase in their electric vehicle sales in the U.S. during the first half of 2024, while Tesla’s sales decreased by 9.6%, according to data from market research firm Cox Automotive.
Tesla chief executive officer (CEO) Elon Musk has tried to pivot investors’ focus away from the company’s core electric vehicles, promising self-driving cars, Robotaxis and supercomputers.
Tesla has also been developing a lower priced electric vehicle that it hopes will appeal to cash-strapped consumers.
On the earnings call, Musk said that Tesla is on track to deliver a new, more affordable electric vehicle car in the first half of 2025. He also said that he expects the first Robotaxi “next year.”
Prior to today (July 24), the stock of Tesla had been down 1% this year compared to a 16% increase in the benchmark S&P 500 index.
Tesla’s shares currently trade at $246.38 U.S. each.
