For the fourth quarter in a row, the company’s operating profit margin has been declining, as the latest financial report showed, and last year it fell year-on-year from 18.7% to 14.4%, reaching a three-year low. Revenue grew by 2% to $25.5 billion and was higher than market expectations, but this did not prevent Tesla shares from falling by almost 8% after the close of trading.
Image source: Tesla
Investors closely monitor the dynamics of specific profit per share of public companies. Tesla’s figure fell to 52 cents per share last quarter, below the 62 cents per share forecast. Tesla’s revenue from sales of electric vehicles fell by 7% from $21.27 billion to $19.9 billion. Tellingly, the company received $890 million in regulatory credits, as receipts from other automakers wishing to compensate for the inconsistency of their production activities with environmental goals, three times more than the result of the same period last year. In this regard, Tesla’s receipts from this item were record-breaking. Probably, the downturn in the electric vehicle market had an effect, forcing other market participants to sell more cars with internal combustion engines and at the same time compensate for this conditional harm to the environment with regulatory credits.
Tesla itself has seen its electric vehicle supply volumes decline year-on-year for the second quarter in a row. It is trying to stimulate demand with various discounts, so these efforts are having a negative impact on its operating profit margin, which fell year-on-year from 18.7% to 14.4% last quarter. The company’s net profit fell by 45% to $1.48 billion. For a company that has always been famous for its ability to extract more profit from electric vehicle production than its competitors, this was a serious blow to the investment attractiveness of its shares. Capital expenditures in the second quarter increased by 10% to $2.27 billion. The company spent $600 million on developing artificial intelligence infrastructure alone. The company’s CEO said that the Dojo supercomputer will be competitive with computing centers based on Nvidia components. Tesla now needs to not only develop an autopilot for electric vehicles, but also invest in improving future Optimus humanoid robots. Tesla’s operating expenses in the second quarter rose 39% to $2.97 billion.
In its investor presentation, Tesla attributed the decline in business profitability to a simultaneous decline in the average selling price of electric vehicles and a decline in sales of the brand’s most popular models. In large regional markets like China and Germany, Tesla now offers electric vehicles on credit for four or five years with zero interest, which is costing the company dearly in the context of high key rates of regional central banks.
Significantly, Tesla’s energy business saw revenue almost double to $3 billion in a year. In essence, the company has been able to supply stationary energy storage systems with more batteries, as demand in the electric vehicle segment is no longer growing at the same rate. The number of installed energy storage systems reached record levels in the second quarter.
Elon Musk said at a quarterly conference that Tesla is putting its own plans to build a plant in Mexico on hold. Initially, it was planned that Tesla’s inexpensive electric cars would be manufactured in Mexico near the border with the company’s now native Texas. Musk is now concerned about Donald Trump’s promises to impose higher duties on cars imported from Mexico, so this casts doubt on the project’s prospects. However, from this statement by Musk it becomes clear that he has virtually no doubt that Trump will win the upcoming presidential election in the United States.
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Source: 3dnews.ru
