Tesla profit plunges
By Chris Isidore, CNN
New York (CNN) — Telsa profit in the second quarter plunged more than 40% from a year ago, as the electric vehicle company has faced both more EV competition from established automakers and a slowing of overall EV sales growth.
The drop in profits is a stark contrast for a company that grew to become the world’s most valuable automaker on surging sales and profitability.
The results underscore how Tesla, a pioneer in bringing electric vehicles to American drivers, now faces more intense competition from rivals at home and abroad. And with the EV market maturing, the growth in consumer interest for EVs has slowed.
Tesla reported adjusted income of $1.8 billiion in the quarter, or 52 cents a share. Analysts had forecast earnings of 61 cents a share, compared to the 91 cents a share it earned a year earlier. Its key measure of profit margin was sharply lower, as a series of price cuts on EVs took a toll.
The April through June period was the second straight quarter of year-over-year sales declines for the company, its first-ever consecutive quarters of declining sales volume. The only previous quarter with a sales decline since Tesla went public came early in the pandemic, when stay-at-home orders forced its factories to close.
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.”
Shares of Tesla (TSLA) fell 4% 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.
The-CNN-Wire
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