Interface News Reporter | Zhou Shuqi
Tesla is experiencing a painful period of stagnant sales and profits, with its net profit being cut in half in the second quarter. Due to underperformance compared to market expectations, Tesla's US stock price plummeted by 7% after market hours.
The latest financial report shows that Tesla's total operating revenue in the second quarter slightly increased by 2% to $25.5 billion, but after excluding revenue from carbon credits, the actual car sales revenue was only $18.5 billion, slightly lower than the market expectation of $18.7 billion.
Due to ongoing promotional policies and continuous investment in the artificial intelligence business, Tesla is struggling to maintain its high profit levels in the past. In terms of the key indicator for measuring the development of its main business, Tesla's gross profit margin for the second quarter has fallen to 14.65%, far below the market expectation of 16.29%. With the support of carbon credits income, Tesla's overall gross profit margin has slightly rebounded to 18%.
Investors see Tesla as a technology company leading technological innovation, but in the current era where autonomous driving technology has not been fully deployed, this imaginative company is increasingly approaching a traditional automaker, and even its profit performance is not as good as the competitors it once looked down upon. The second quarter financial data released by General Motors during the same period showed that its operating profit margin was 9.3%, surpassing Tesla's 6.3%.
Tesla stated in a statement that its profits were mainly affected by "increased operating expenses driven by artificial intelligence projects" and "restructuring costs". Affected by approximately 10% of layoffs in April, Tesla reported a restructuring expense of $622 million.
The electric car manufacturer announced adjusted earnings per share of 52 cents, lower than the 61 cents widely believed by Wall Street analysts. A year ago, Tesla announced earnings per share of 91 cents, a year-on-year decrease of 43%. If the restructuring costs are removed, the adjusted earnings per share will be close to 66 cents.
In the second quarter, Tesla sold a total of 444000 new cars worldwide, a decrease of 4.8% compared to the same period last year. This is the first time that Tesla has experienced a year-on-year decline in sales for two consecutive quarters. In the first half of this year, Tesla's global deliveries decreased by 6.6% year-on-year to 837700 vehicles. According to research firm Cox Automotive, Tesla's share of electric vehicle sales in the United States has fallen below 50% for the first time.
Tesla, which is in a period of strategic turbulence, is indecisive about its future direction of development. The company once gave up producing the more affordable Model 2 model, but later returned to it; CEO Elon Musk has invested resources in Robotaxi, but has postponed the release plan from August to October; Tesla laid off the entire supercharging team in April, but quickly rehired these employees.
Musk, who has achieved huge salary returns, urgently needs to find a stable way for the company to continue growing and making money, but it is difficult to determine whether Robotaxi can become a driving force for performance recovery. Several companies, including Google, have been developing Robotaxi for many years, but currently only provide corresponding services in a few cities.
Tesla is good at describing a beautiful vision to investors, but lacks the execution power to put it into action. As early as 2018, Musk proposed to research and develop autonomous vehicle and explore the possibility of "sharing" vehicles. After six years, he talked about this Airbnb model again during the earnings call, but it will take at least another two months to see initial results.
Experts in the field of autonomous vehicle and regulation said that it might take several years for the company to launch a fully autonomous vehicle approved by the regulatory authorities. But Musk emphasized that he has been in constant communication with regulatory agencies.
Now we have billions of miles of mileage, coupled with powerful algorithm analysis and AI capabilities, it will be very difficult for regulators to refute us again
Musk also mentioned that the fully autonomous driving software FSD V12.5 or V12.6 versions will enter China, Europe, and other countries, and will be submitted to regulatory authorities for review after early release. It is expected to be approved before the end of this year. This statement is believed to have finally confirmed the timetable for FSD's entry into China.
FSD is seen as the key to stimulating Tesla's sales growth in the Chinese market. Mid to high end models in the same price range as Tesla are competing for city navigation assisted driving functions, with richer product features and higher cost-effectiveness. Tesla has lowered prices multiple times in China, but the marginal effect on boosting sales is gradually diminishing.
According to data from the China Association of Automobile Manufacturers, Tesla sold 71000 new cars in June, a year-on-year decrease of 24% and a month on month decrease of 2.2%. On the contrary, car companies such as BYD, NIO, Zero Run, and Extreme Krypton have achieved their best results in history.
Tesla's current main sales models, Model 3 and Model Y, have gradually become outdated over time. However, during the earnings call, Musk did not announce the latest plans for the next generation of affordable models, citing the reason of "preventing any impact on existing model sales".
According to Tesla's plan, more affordable models are still scheduled to start production in the first half of 2025. These vehicles will utilize certain features of the next-generation platform as well as Tesla's existing platform, and will be able to contribute to production alongside existing models.
Tesla stated that the cost reduction of this method will be lower than previously expected, allowing it to cautiously increase car production in a more efficient capital expenditure manner during uncertain times.
The investment plan for Tesla's Mexico factory seems to be stalled, awaiting the results of the US election. Musk said in a conference call that his recently supported Republican candidate, former President Donald Trump, may impose tariffs on cars imported from Mexico. If Trump is elected, then investing heavily in Mexico will be meaningless
Affected by the tariffs imposed by the European Union, Tesla is adjusting its export plan for its Shanghai factory, assessing more alternative demand to cope with policy adjustments and reviews by European authorities. In the second quarter, Tesla's Berlin factory in Germany began producing the right-hand drive Model Y and delivered it to markets such as the UK, Israel, and Taiwan.