- Tesla reported its second-quarter earnings on Wednesday, disclosing far lower profits than expected.
- The company revealed earnings of 31 cents per share, less than the 51 cents per share Wall Street predicted.
- Despite this, its revenue was $28.23 billion against an expected $25.71 billion.
- For the first time in more than two years, Tesla reported negative free cash flow of $1.1 billion.
- Tesla's stock, which had already fallen about 14% this year, dipped further following the earnings report.
- Tesla's profitability was hurt by higher operating expenses driven by AI, lower average selling prices, and weaker regulatory credit revenue.
- The company delivered 480,126 vehicles in the second quarter, up from 384,122 vehicles a year earlier.
- Musk plans to spend more than $25 billion this year, nearly triple last year’s $8.53 billion, focusing on AI and robotics.
Tesla's second-quarter earnings fell short of expectations, reporting a profit of 31 cents per share against a forecast of 51 cents. Despite revenue growth to $28.24 billion, the company faced its first negative free cash flow in over two years, totaling $1.1 billion as it ramped up spending on AI and robotics.124
The Austin-based automaker delivered 480,126 vehicles in Q2, exceeding Wall Street's expectations and up from 384,122 a year earlier. However, profitability was impacted by higher operating expenses related to AI, lower average selling prices, and reduced regulatory credit revenue.67
Musk's ambitious plans include spending over $25 billion this year, nearly triple last year's $8.53 billion, as he pivots towards AI and robotics, which are seen as future growth areas. Capital expenditure for the quarter was $5.8 billion, slightly below expectations of $6.2 billion.8
Analysts express concern over Tesla's ability to maintain its capital spending pace amid increasing cash burn. Thomas Monteiro from Investing.com noted, "Given that most of the Tesla premium rests on future narratives, every capex dollar Tesla commits will be judged more harshly than it was a year ago."
Despite the challenges, Tesla remains the world's most valuable automaker, valued at about $1.4 trillion, reflecting investor optimism about its future in self-driving technology and robotics.
“Tesla earned just 31 cents per share, missing Wall Street's 51-cent estimate, as higher operating expenses from AI and lower average selling prices squeezed margins. The company also deployed 13.5 GWh of energy storage in the quarter, up from 9.6 GWh a year earlier, signaling growth in its non-auto business.”
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