Telsa profits plunged more than 40% compared to a year ago, a steeper drop than expected for the company that has been facing a tougher environment for electric vehicle sales.
Tesla reported it earned adjusted income of $1.8 billiion in the quarter, or 52 cents a share. Analysts had forecast earnings of 61 cents a share, which still would have been sharply lower than the 91 cents a share it earned a year earlier.
Revenue of $25.5 billion was essentially flat, a good result for the company which reported 5% fewer vehicles sold than last year. But the adjusted profit margin excluding interest, taxes, depreciation and amortization (EBITDA) was trimmed to to 14.4% from 18.7% a year ago.
It was the second straight quarter of year-over-year sales declines for the company, the first time it ever suffered consecutive quarters of declining sales volume. The only previous quarter that saw a sales decline since the company turned public was during the early months of the pandemic, when stay-at-home orders forced the closing of its factories.
The company has become the most valuable automaker in the world in large part due to its growth rate of about 50% in some years. But Tesla has been facing growing competition from established automakers, which are now offering their own EVs. In the second quarter it sold less than half all US EV sales for the first time in years, according to sales tracker Edmunds. A few years ago it dominated that market.
Tesla did not give a new sales target for the full year. But it did warn that “In 2024, our vehicle volume growth rate may be notably lower than the growth rate achieved in 2023,” a statement that seems obvious given the drop in sales volume over the first half of the year.
Shares of Tesla (TSLA) fell 3% in after-hours trading. Shares are down about 1% so far this year through Tuesday’s close, after being down as much as 44% earlier this year.
This is a developing story. It will be updated.
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