Elon Musk, CEO of Tesla.
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Tesla Automakers' shares were headed for their biggest decline since January after the electric carmaker reported weaker-than-expected quarterly earnings and another decline in automotive revenue.
The stock was down 11% late Wednesday morning at $219.58. It is now down 12% for the year, while the Nasdaq is up 17% during that time.
Tesla said Tuesday that automotive revenue fell 7% from a year earlier to $19.9 billion while margins also declined. Total revenue rose 2% to $25.5 billion.
The company has been forced to cut prices globally and offer discounts and incentives amid slowing sales and increasing competition, especially in China.
Tesla remains the top-selling electric car company in the United States by a wide margin, but it is losing market share to a growing number of competitors due to its aging sedan and SUV lineup and the impact of Musk's controversial and political comments.
Adjusted earnings came in at 52 cents a share in the second quarter, below analysts’ average estimate of 62 cents, according to LSEG. Tesla’s adjusted operating margin shrank to a three-year low, falling to 14.4% from 18.7% a year earlier. It was the fourth straight quarter of contraction.
Investors have focused on a number of other areas of Tesla’s story, including when the company will introduce a new mass-market car to revitalize its lineup. Musk said on an earnings call Tuesday that Tesla is on track to introduce a new “affordable” car in the first half of next year.
Robotic taxis were a big topic on the earnings call. Musk envisions a world where car owners could license their Teslas as part of an Uber-style ride-hailing service, with the cars driving themselves.
Asked when he expected to launch the first robotaxi flight, Musk said: “I would be shocked if we couldn’t do it next year.”
Musk has a history of promising things on a certain timeline and not delivering. On Tuesday, he pushed back the company’s robotaxi event to October, after previously saying it would be held in August.
“That’s because I wanted to make some significant changes that I think will improve the car,” Musk said, adding that Tesla “will show off a few other things.” He did not provide details.
