Tesla stumbled through its second quarter with revenue dropping 10% to $22.74 billion and deliveries falling 13.5% compared to last year. The electric car maker delivered about 373,728 vehicles, mostly Model 3 and Model Y cars, while producing 25,000 more vehicles than it sold. This gap between production and deliveries shows Tesla‘s struggling to find buyers in a competitive market.
Wall Street analysts expect Tesla’s adjusted earnings per share to fall about 36% to around $0.33. The company only counts revenue when it delivers cars to customers, so those 25,000 unsold vehicles won’t help this quarter’s numbers. Tesla faces tough competition and weaker demand as more car companies make electric vehicles. The company also faces challenges from tariffs on batteries sourced from China, which could further impact profitability. Despite these challenges, some market analysts remain optimistic about Tesla’s long-term prospects, suggesting that the company’s ongoing innovation and expansion into new markets could eventually stabilize earnings. One analyst supports Tesla and Google, citing their potential for growth in renewable energy and AI integration as key factors that may enhance their profitability in the coming years. Additionally, as infrastructure for electric vehicles expands, Tesla’s market position could improve, attracting a more extensive customer base.
Tesla’s stock has dropped 18% this year, partly because CEO Elon Musk announced he’s starting a new political party called the “America Party.” When he made this announcement, Tesla’s stock fell 7% in one day. Morgan Stanley called Musk’s political activities a “party crasher” risk for investors but still thinks the stock will go up eventually.
Despite these problems, investment firm Wedbush sees huge potential for Tesla’s future. They’re encouraged by Musk’s return to what he calls “wartime CEO” mode. He’s promised to work seven days a week and sleep at the office to fix Tesla’s problems. Wedbush believes this renewed focus on Tesla instead of politics will help the company succeed.
Musk plans to talk about Tesla’s robotaxi project during the earnings call, which could excite investors about the company’s future. Tesla’s also working on improving its self-driving technology, which many see as key to the company’s long-term success. The company must also deal with losing EV tax credits in the U.S., which might force Tesla to cut prices or spend more on marketing. Tesla faces pressure on its gross margins due to discounted offerings and reduced delivery volumes.
Tesla’s trying to control costs and adjust production to match lower demand. With Musk back to focusing on the company full-time, Wedbush thinks Tesla can overcome its current challenges and deliver strong results in the future, even though many investors remain doubtful about the company’s near-term prospects.