Tesla’s quarterly results miss estimates after price cuts hit bottom line

Tesla’s second-quarter margin missed analysts’ estimates as price cuts and incentives to spur sagging demand continued to hurt the bottom line while the company intensifies its self-driving technology efforts, it said on Tuesday.

Tesla recorded automotive gross margin excluding regulatory credits of 14.65% in the second quarter, compared with estimates of 16.29%, according to 20 analysts polled by Visible Alpha.

It was the lowest quarterly margin in more than five years, and shares of the electric-vehicle maker were down about 4% in after-hours trading.

TESLA CYBERTRUCK MAKING INROADS ON THE ROAD

Tesla’s quarterly margin missed analysts’ estimates. (Photo by Costfoto/NurPhoto via Getty Images / Getty Images)

The results were a reminder of headwinds facing the company in its main auto business, even as CEO Elon Musk reoriented the carmaker to self-driving technology, helping Tesla stock recoup most of its losses this year.

The company on Tuesday reported revenue of $25.50 billion for the three months ended June, compared with $24.93 billion a year earlier. Analysts on average had estimated $24.77 billion, according to LSEG data.

ELON MUSK SAID TESLA MOVED ROBOTAXI EVENT ‘FOR IMPORTANT DESIGN CHANGE’

Tesla said its new vehicles for 2025 are on track. (Photo by Joe Raedle/Getty Images / Getty Images)

Tesla’s sales of regulatory credits nearly tripled to $890 million in the second quarter from a year earlier.

“Plans for new vehicles, including more affordable models, remain on track for start of production in the first half of 2025,” Tesla said in a statement.

Tesla reiterated that cost reductions for new vehicles would be less than expected.

GET FOX BUSINESS ON THE GO BY CLICKING HERE

Net income was $1.48 billion in the second quarter, compared to $2.70 billion a year ago.

Adjusted earnings of 52 cents per share missed the Wall Street consensus of 62 cents, as calculated by LSEG.