Tesla shares close down 12% after earnings miss for biggest slump since 2020

Tesla
shares
plummeted
the
most
since
2020
after
the
electric
vehicle
maker
reported
weaker-than-expected
quarterly
earnings
and
another
drop
in
automotive
revenue.

The
stock
closed
down
12%
on
Wednesday
at
$215.99.
It’s
now
down
13%
for
the
year,
while
the
Nasdaq
is
up
16%
over
that
stretch.

Tesla
on
Tuesday
said
auto
revenue

declined
7%
from
a
year
earlier
to
$19.9
billion
while
margins
also
fell.
Total
revenue
increased
2%
to
$25.5
billion.

The
company
has
been
forced
to
slash
prices
globally
and
offer
discounts
and
incentives
as
it
faces
slowing
sales
and
rising
competition,
especially
in
China.

Tesla
remains
the
top
seller
of
electric
vehicles
in
the
U.S.
by
far,
but
is
losing
market
share
to
a
growing
number
of
rivals
due
in
part
to
its
aging
lineup
of
sedans
and
SUVs
and
the
impact
of
Musk’s

incendiary
and
political
commentary.

Adjusted
earnings
of
52
cents
a
share
for
the
second
quarter
trailed
the
average
analyst
estimate
of
62
cents,
according
to
LSEG.
And
Tesla’s

adjusted
operating
margin
shrank
to
the
lowest
in
three
years,
dropping
to
14.4%
from
18.7%
a
year
earlier.
It’s
the
fourth
straight
quarter
of
shrinkage.

Investors
have
been
focused
on
a
number
of
other
areas
around
the
Tesla
story,
including
when
the
company
will
introduce
a
new
mass-market
car
to
reinvigorate
its
lineup
of
vehicles.
Musk
said
on
the
earnings
call
Tuesday
that
Tesla
is
on
track
to
deliver
a
new
“affordable”
car
in
the
first
half
of
next
year.

Robotaxis
were
a
big
topic
on
the
earnings
call.
Musk
envisions
a
world
in
which
owners
can
authorize
their
Tesla
vehicle
to
be
used
as
part
of
an
Uber-style
ride-hailing
service,
with
the
cars
driving
autonomously.

When
asked
when
he
expects
the
first
robotaxi
ride,
Musk
said,
“I
would
be
shocked
if
we
cannot
do
it
next
year.”

Musk
has
a
history
of
promising
things
on
a
particular
timeline
and
not
delivering.
On
Tuesday,
he
pushed
back
the
date
of
the
company’s
robotaxi
event
to
October,
after
previously
saying
it
would
take
place
in
August.

“This
is
because
I
wanted
to
make
some
important
changes
that
I
think
would
improve
the
vehicle,”
Musk
said,
adding
that
Tesla
is
“going
to
show
up
a
couple
of
other
things.”
He
didn’t
provide
details.