By Joy Baba-Yesufu
Tesla reported a hefty drop in second-quarter profits due to the effect of price cuts while spending aggressively on autonomous driving and other technology.
Elon Musk’s electric vehicle company reported profits of $1.5 billion, down 45 per cent, on revenues of $25.5 billion, which were up two per cent behind an increase in its energy generation and storage business.
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.
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, he 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 vowing to press on with technological pushes in artificial intelligence and autonomous driving.
The company postponed this month 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.
Musk told a conference call that “moving it back a few months allowed us to improve the robotaxi as well as add in a couple other things for the product unveil” now set for October 10.
Musk has a history of making bold predictions about the prospects for autonomous vehicles, saying conventional autos will one day be as obsolete as a horse and buggy.
But Musk has fallen short of projections about the timeframe for self-driving technology, after previously predicting the company would achieve the breakthrough by 2018.
Musk acknowledged his “overly optimistic” prior forecasts but said he expects the robotaxi could achieve full autonomy by the end of 2024, adding “I would be shocked if we cannot do it next year.”
The results come as Musk has lately deepened his commitment to electoral politics, coming out loudly for Donald Trump in the 2024 presidential election despite the former president’s longstanding denial of climate change — which has been a professed Musk
