Tesla, the electric carmaker led by CEO Elon Musk, experienced a significant drop in its stock price during pre-market trading in the U.S. The shares fell by over 8% after the company reported earnings for the second quarter that failed to meet expectations. This decline led to the stock trading down by 7.3% at 04:37 ET.
In the June quarter, Tesla reported a 7% year-on-year decrease in automotive revenue, amounting to $19.9 billion. Additionally, the company’s adjusted earnings margin also experienced a decline. To combat slowing sales and increasing competition, particularly in China, one of its key markets, Tesla has been compelled to reduce prices globally and provide discounts and incentives.
Despite being the leading seller of electric vehicles in the U.S., Tesla has been losing market share to competitors due to its aging lineup of sedans and SUVs and the impact of Musk’s controversial and political statements. The stock has faced mixed opinions from investors, with some expressing concerns about the pressure on its core car business, while others remain optimistic about Musk’s promised advancements in autonomous driving, AI, and robotaxis.
During the recent earnings call, Musk mentioned that Tesla is on track to launch a new “affordable” car in the first half of the upcoming year. The concept of robotaxis, where Tesla vehicles can operate as part of a ride-hailing service similar to Uber autonomously, was a major focus of the call. Musk expressed his belief that the first robotaxi ride could potentially happen next year, despite his history of setting ambitious timelines that are not always met.
Musk delayed the company’s robotaxi event to October, shifting it from the previously announced August timeline. He explained that this delay was to implement important changes to improve the vehicle, while also hinting at the introduction of additional features without providing specific details.
As the market continues to monitor Tesla’s progress, questions linger about the introduction of a new mass-market car to revitalize its vehicle lineup. Despite the challenges faced by the company, Musk’s vision for the future of Tesla remains centered on innovation and technological advancements in the automotive industry.
In summary, Tesla’s recent stock decline reflects the ongoing challenges in its auto business, but investors and enthusiasts alike are eagerly anticipating the company’s future developments under Elon Musk’s leadership.