For Tesla, the second quarter of this year can be described as a combination of challenges and hopes: revenue set a new record, but net profit declined significantly, the automotive business was under pressure, energy storage business grew rapidly, and autonomous driving and humanoid robot businesses are also about to enter the "fast lane".
On July 24th Beijing time, Tesla released its Q2 2024 financial report. The report shows that Tesla's second quarter revenue was $25.5 billion, a year-on-year increase of 2%, setting a historical record. The net profit attributable to common shareholders was $1.478 billion, a year-on-year decrease of 45%.
Tesla Q2 financial report screenshot
In the second quarter financial report conference call, Musk disclosed the progress of driverless taxis and FSD (Tesla Fully auto drive system). Musk stated that Tesla may obtain FSD licenses in other markets, such as Europe and China, by the end of this year. The Robotaxi launch event will be postponed to October 10th, two months later than originally planned.
Affected by performance and other factors, Tesla's stock price fell 2.04% to $246.38 per share on July 23 Eastern Time, with a drop of over 8% at one point after trading. As of press time, it has dropped 7.72%.
Increasing revenue without increasing profits poses challenges for the automotive business
At present, Tesla is in a situation of "increasing revenue without increasing profits". In the second quarter, the company's revenue increased year-on-year, but its net profit showed a trend of "halving".
According to financial report data, Tesla's revenue from its automotive business in the second quarter was $19.878 billion, a year-on-year decrease of 7%. In the second quarter of 2024, Tesla delivered a total of 444000 vehicles in the global market, a year-on-year decline of about 4.8%, marking the second consecutive quarter of year-on-year decline.
At present, Tesla cars are facing certain challenges in both the United States and China, the two major markets. According to Cox Automotive data, in the first half of 2024, Tesla's competitors' electric vehicle sales in the United States increased by 33% year-on-year, while Tesla's sales decreased by 9.6% during the same period. In the second quarter, Tesla's market share in the US electric vehicle market fell below 50% for the first time.
In the Chinese market, the price war for cars is fierce, and Tesla has repeatedly lowered prices or launched promotional activities, which has had a certain impact on the profits of its automotive business. In April, Tesla launched a large-scale price reduction, lowering the price of all Model 3/Y/S/X models by 14000 yuan. At the same time, a "zero down payment" or "limited time zero interest" policy has been introduced for designated models of Model Y.
On July 1st, Tesla China announced on Weibo that it will launch a limited time car purchase discount policy, targeting its main models Model 3 and Model Y with multiple discounts such as "5-year zero interest" promotion and low interest car purchases. Compared to the standard annual fee rate of 2.5%, it can save more than 20000 yuan in interest. The promotion will continue until August 31st.
Behind the price reduction is the sales pressure that Tesla is facing in China. According to data from the China Association of Automobile Manufacturers, Tesla's wholesale sales in China were 71000 units in June 2024, a year-on-year decrease of 24.2%, and its market share in the automotive industry (including fuel vehicles) was 3.3%. In the first half of 2024, Tesla's wholesale sales in China were 426600 units, a year-on-year decrease of 10.5%.
For the Cybertruck electric pickup truck, Tesla did not disclose the specific production volume, but the company stated that Cybertruck production has more than doubled month on month and is expected to achieve profitability by the end of the year. Meanwhile, Tesla revealed the progress of its new car model: low-cost cars are expected to start production in the first half of 2025; The commercial truck Semi is expected to start production by the end of 2025.
Energy storage business grows strongly, with autonomous driving and robots becoming the "engines"
Despite facing certain challenges in the automotive industry, Tesla's energy storage business experienced an explosion in the second quarter. According to financial report data, Tesla's energy storage business achieved sales of $3 billion in the second quarter, a year-on-year increase of 100%. The gross profit margin of this business was close to 25%, a year-on-year increase of 6 percentage points.
It is understood that Tesla's energy storage business has maintained strong growth momentum for multiple consecutive quarters and is becoming Tesla's business growth engine. In the second quarter, the installed capacity of Tesla's energy storage products reached 9.4 GWh, a month on month increase of about 132%, setting a new record for single quarter installed capacity. Among them, Tesla's energy storage products Megapack (Tesla's ultra large electrochemical commercial energy storage system) and Powerwall (Tesla's household energy storage battery) have achieved record installations, and the energy business has achieved record profits and gross profits. This year, its revenue growth rate will exceed that of the electric vehicle business.
Tesla told reporters that its Megapack energy storage system not only supports low-cost, high-density utility and commercial projects up to gigawatt hours, but also conforms to the global trend of vigorously developing artificial intelligence and the surge in demand for stable power supply. In remote areas, Tesla's energy storage products have brought stable power supply to local residents and effectively improved their living conditions; In developed countries, these products are also widely used in various fields such as commercial construction and industry, injecting new vitality into the sustainable development of society.
In the field of energy storage, Tesla is also increasing its focus on "Made in China". On May 23rd, the groundbreaking ceremony of Tesla's Shanghai Energy Storage Super Factory was held in Lingang, Shanghai. It is reported that Tesla's Shanghai Energy Storage Gigafactory is Tesla's first energy storage Gigafactory outside of the United States. The factory will produce Tesla Megapacks and is expected to start production in the first quarter of 2025. The annual production capacity is expected to reach 10000 units and the energy storage capacity is nearly 40GWh.
At a recent media briefing, Tesla's Global Vice President Tao Lin stated that the Shanghai Energy Storage Gigafactory will be completed as planned by 2025, making it Tesla's first energy storage Gigafactory outside of the United States. Tesla's Shanghai Gigafactory will continue to maintain current production and has great confidence in the Chinese market.
Elon Musk: FSD expected to enter China by the end of the year, Robotaxi release postponed
In addition to the energy storage business, new news has also come from Tesla's FSD and Robotaxi businesses. During the second quarter earnings conference call, Musk stated that Tesla may obtain FSD licenses in other markets, such as Europe and China, by the end of this year.
The Big Ideas 2024 report released by ARK Ark Fund shows that the accident rate of Tesla FSD driving is about 80% lower than that of human drivers. Compared to ordinary vehicles, FSD improves driving safety by 16 times, and compared to other autonomous driving companies, FSD's safe driving mileage is over 70 times higher.
Thanks to its strong capabilities in autonomous driving, Tesla is also promoting the development of Robotaxi, a self driving taxi. Tesla has stated that Robotaxi will be released on October 10th and may be put into use by the end of this year or at the latest next year. Previously, Robotaxi was originally scheduled to be released in August, but Musk stated that the reason for the delayed release was his request for changes to the vehicle design. He also reiterated the advantages of Robotaxi, stating that Robotaxi vehicles can be used 24/7 and can become full-time members or part-time contributors to the fleet, with owners directly sharing the profits with Tesla.
According to data from Ruqi Travel, the average annual compound growth rate of China's autonomous taxi market from 2024 to 2030 is as high as 247.7%, and the domestic market share of autonomous taxis is expected to reach 488 billion yuan by 2030.
During the earnings conference call, Tesla also revealed that the company's second-generation humanoid robot Optimus has been handling battery related tasks in the factory. It is expected that thousands of Optimus will be performing tasks at Tesla's factory by the end of 2025, and deliveries to external customers will begin in 2026.
It is reported that at the 2024 shareholders' meeting, Tesla demonstrated the ability of its humanoid robot Optimus to flexibly grasp, place objects, and walk smoothly. For Tesla, Optimus robots are an important part of the future business model. Musk expects that Optimus will significantly improve the production efficiency of Tesla factories in the future and is expected to occupy a place in the global labor market.
Musk predicted at Tesla's 2024 shareholder meeting that the ratio of humanoid robots to humans in the future will exceed 1:1, and even reach an astonishing 2:1 ratio. It is expected that the number of humanoid robots will reach 10-20 billion units, and the potential market value of humanoid robots will be as high as $25 trillion.
According to a research report by Huaxin Securities, based on an annual production of 1 billion humanoid robots and Tesla's market share of over 10%, it would be equivalent to an annual production of 100 million Optimus robots, with each unit costing around $10000. If sold for $20000 each, Tesla could earn approximately $1 trillion in profits annually, and the deployment of humanoid robots could potentially increase Tesla's market value to $25 trillion in the future.
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