Tesla's Profit Drops for Second Quarter in a Row

Tesla’s profits declined significantly for the second quarter in a row, as the company faced reduced demand and increased competition in the electric vehicle sector.

The company’s Q2 bottom line dropped by 45% compared to the previous year, despite attempts to boost sales through price reductions and low-interest financing options.

Tesla, headquartered in Austin, Texas, reported earnings of $1.48 billion from April to June, down from $2.7 billion in the same timeframe in 2023, marking a consecutive quarterly decline in net income.

On the bright side, revenue for the second quarter grew by 2% to $25.5 billion, surpassing Wall Street predictions of $24.54 billion, according to FactSet.

However, Tesla’s earnings per share, excluding one-time items, were 52 cents, which fell short of the anticipated 61 cents.

Revenue from regulatory credits, which other automakers purchase to meet emissions targets, reached $890 million, double the amount from most previous quarters.

Earlier this month, Tesla disclosed that it sold 444k vehicles from April through June, a 4.8% drop from the 466k sold during the same period last year. Although this exceeded analysts’ expectations of 436k units, it still reflected a decline in demand for Tesla’s older models.

To address the surplus of unsold vehicles at the end of Q1, Tesla reduced some factory production and cut costs significantly, including laying off over 10% of its global workforce. Despite these measures, the company’s net income still fell by 45% in the second quarter to $1.5 billion.

Tesla’s gross profit margin decreased to 18% from 18.2% the previous year and was significantly lower than the 29.1% peak in Q1 2022. Despite the tough operating conditions, Tesla achieved record quarterly revenue, with its energy-storage business generating over $3 billion, twice the amount from the same period last year.

For the quarter, Tesla reported $622 million in “restructuring and other” expenses, which included workforce reductions. The company noted to investors that it is in between two major growth phases, with the next phase expected to come from advancements in autonomous vehicles and new models. However, Tesla cautioned that its sales growth in 2024 might be significantly lower than the growth rate achieved in 2023.

CEO Elon Musk informed analysts that the company’s robotaxi reveal scheduled for August had been postponed to October 10 for further enhancements. Musk also indicated that additional products would be unveiled at this event.

The company anticipates starting limited production of the Optimus humanoid robot early next year, with larger-scale production for external customers planned for 2026.

Tesla also aims to introduce a more affordable vehicle in the first half of the next year.

Regarding future expansion, Musk stated that the decision to build a new factory in Mexico would be delayed until after the U.S. presidential election, considering potential tariffs on Mexican-made vehicles.

Tesla investors experienced a turbulent year, with shares plunging over 40% at one point. However, they have since recovered most of those losses.

Investors can long Tesla using our 1x Tesla, 2x Tesla, 3x Tesla.

Alternatively, traders can short Tesla using our -1x Tesla, -2x Tesla, -3x Tesla.

Websim is the retail division of Intermonte, the primary intermediary of the Italian stock exchange for institutional investors. Leverage Shares often features in its speculative analysis based on macros/fundamentals. However, the information is published in Italian. To provide better information for our non-Italian investors, we bring to you a quick translation of the analysis they present to Italian retail investors. To ensure rapid delivery, text in the charts will not be translated. The views expressed here are of Websim. Leverage Shares in no way endorses these views. If you are unsure about the suitability of an investment, please seek financial advice. View the original at

Your capital is at risk if you invest. You could lose all your investment. Please see the full risk warning here.