Electric-pioneer - Tesla with second profits retreat in a row
Tesla, the Pioneer of Electric Vehicles, Posts a Significant Profit Decline for the Second Consecutive Quarter
Tesla, the electric vehicle trailblazer led by Tech Billionaire Elon Musk, reported a significant profit decline for the second quarter in a row. The company generated approximately 1.48 billion Dollars (1.36 Mrd Euros) in revenue from March to June, which is 45% less than the previous year.
Musk tried to appease investors once again with promises of a brilliant future for Tesla due to self-driving cars and the humanoid robot Optimus. However, he also postponed the presentation of the Robotaxi prototype from early August to October 10th. He now expects to produce Optimus robots only by the end of this year, with plans to sell them to other companies in 2026. Mus has been overly optimistic about such predictions in the past.
Investors were skeptical this time: The stock price dropped by almost 8% in after-hours trading on Tuesday.
Revenue Growth is Driven by Energy Business
Tesla's quarterly revenue grew by 2% to 25.5 billion Dollars (23.5 Mrd Euros). However, this growth was mainly due to the expanding energy and energy storage business, which doubled to 3 billion Dollars (2.75 Mrd Euros). The automotive business saw a 7% decrease in sales, amounting to roughly 19.9 billion Dollars (18.3 Mrd Euros).
The electric vehicle manufacturer, which once sold every vehicle produced, is now feeling the effects of market cooling and increasing competition from other manufacturers. Tesla delivered approximately 444,000 electric vehicles in the second quarter, which was slightly better than analysts' expectations. However, repeated price cuts also impacted the profit margin.
No Sales Forecast for 2024
Tesla delivered around 1.8 million vehicles in total last year. There is still no concrete sales forecast for this year - only the acknowledgment that growth will be slower.
Uncertainty remains about Tesla's plans for an affordable model that could boost sales. Mus now anticipates introducing a more affordable vehicle in the first half of 2025.
Automotive expert Ferdinand Dudenhoeffer from the Center Automotive Research in Bochum estimates that Tesla will sell only around 1.6 million vehicles this year. This would mean that production capacity would be utilized to less than 70%. "Classic carmakers would be significantly in the red under these capacity utilization conditions," Dudenhoeffer emphasized. The first half of the year saw cost savings through personnel reductions, among other measures.
Advanced "Autopilot" Software in Europe?
In the US, Tesla has been allowing drivers to test a more advanced version of the Autopilot assistance system for months. Tesla calls it "Full Self-Driving" (FSD, fully self-driving). However, a Tesla in reality cannot be driven autonomously with this current FSD version, and the driver must always maintain control.
Musk announced that Tesla would soon apply for regulatory approval for the FSD technology in Europe, China, and other regions. "And I think we'll probably get it by the end of the year," Musk stated.
Several automakers have shown interest in integrating FSD into their cars, Mus said, without mentioning specific company names. He also acknowledged that even if a deal is reached, it could take years before Tesla sees licensing fees from such collaborations.
Musk remains convinced that FSD may only require human intervention seldomly this year. "I would be surprised if we don't make it happen this year."
- Despite the profit decrease, Tesla continues to innovate, with Musk revealing plans for a self-driving car feature called FSD in Europe and other regions.
- In the automobile industry, Tesla's rival, Ferdinand Dudenhöffer from the Center Automotive Research, predicts a slower growth rate for Tesla in 2023, with sales estimated to be around 1.6 million vehicles.
- The United States of America has already seen Tesla drivers testing an advanced version of the Autopilot assistance system, called FSD, for several months.
- The electric car revolution has not only impacted Tesla but also the entire electro industry, with increased competition leading to a revenue decrease in the automotive business.
- Elon Musk's optimism about Tesla's future, including the production of Optimus robots, has been met with skepticism from investors, leading to a drop in the company's stock price.
- The automatic revenue growth for Tesla in the second quarter was largely driven by the expansion of the energy and energy storage business, which saw a significant increase in revenue compared to the previous year.
