SAN FRANCISCO — As Tesla’s profit continued to slide in the second quarter, CEO Elon Musk reinforced his support for former president Donald Trump’s desire to wipe away electric-vehicle tax credits, even though such a policy could hurt his company.
The billionaire, however, was focused on the long term, saying such incentives would be irrelevant to him in the future: “The value of Tesla, overwhelmingly, is autonomy,” he said during Tuesday’s earnings call, highlighting the company’s focus on self-driving technology. “These other things are noise relative to autonomy.”
Musk’s comments came after Tesla reported disappointing earnings Tuesday, posting a 45 percent decline in quarterly profit from a year earlier. To allay investors’ concerns, he doubled down on his lofty promises for a driverless future, saying he will unveil his plans for a fully autonomous robotaxi in October.
Those plans, however, have been continuously delayed, are scant on detail and have left analysts and investors confused about the company’s prospects. “Perhaps more than ever in the company’s recent history, Tesla’s investors need results,” said Thomas Monteiro, senior analyst at Investing.com. “Those will have to come fast.”
Tesla said net profit for the second quarter fell 45 percent to $1.48 billion, while revenue edged up 2 percent to $25.5 billion. Executives were confident last quarter that sales would turn around; they attributed the dip to a unique confluence of factors, including a global slowdown in EV sales and production disruptions. Shares of Tesla fell about 3 percent in after-hours trading.
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Musk initially said he would unveil the “cybercab” in August, but moving the launch back a few months “allowed us to improve the robotaxi as well as add in a couple of other things for the product unveil.”
Musk said he expects to have the first fully autonomous ride “possibly by the end of this year. I would be shocked if we cannot do it next year.” But he added that his “predictions on this have been overly optimistic in the past.”
According to the National Highway Traffic Safety Administration, any company seeking to operate a noncompliant vehicle, like a robotaxi without a steering wheel or gas pedals, must apply for and receive an exemption from the agency before operating on public roads. As of last week, Tesla has not applied for any exemptions for a robotaxi in the United States, NHTSA said in an email to The Washington Post.
Gene Munster, an analyst with Deepwater Asset Management, said Tesla’s tight margins have left investors desperate for the company to unveil the “the next thing,” but he is still optimistic about the company’s future, given Musk’s audacious bets on autonomy.
“There is no company like Tesla that is trying to solve these complex problems. This company is all in,” he said.
Musk’s endorsement of Trump last week put a spotlight on what the Tesla CEO stands to gain or lose from a potential second term. While the former president said he “loves” Musk, he has vowed to “kill” the industry if elected by gutting pro-EV regulations. Musk, who is now playing an outsize role in GOP politics, said removing electric-vehicle incentives would be “devastating for our competitors” and only “hurt Tesla slightly.”
Separately, after Tuesday’s earnings call, Musk launched a poll on the social media site X asking people whether Tesla should invest $5 billion into his AI start-up called xAI. Musk drew criticism earlier this year after CNBC reported that he had diverted chips allocated for Tesla to the AI start-up.
Investors have already questioned Musk’s devotion to Tesla after he tweeted in January that he was “uncomfortable” growing Tesla to be a leader in AI and robotics without having about 25 percent voting control of the company.
Musk said the poll was “just to test the waters” and such a move would require board approval and a shareholder vote. Still, the Tuesday night poll — along with his support of Trump — is unlikely to quell concerns that the billionaire is putting his own interests ahead of Tesla.
Jessica Caldwell, the head of insights at auto industry ratings and research provider Edmunds, said Musk’s public support of the former president “has the potential to alienate Democratic-leaning consumers who are more likely to be EV buyers.”
“The road ahead for Tesla is already laden with obstacles amid increasing global competition and an aging product lineup,” she said. “Giving prospective EV buyers any sort of political reason to avoid purchasing a Tesla is probably not what the company needs right now.”
Faiz Siddiqui contributed to this report.
Source link : https://www.washingtonpost.com/technology/2024/07/23/tesla-secondquarter-earnings-slump/
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Publish date : 2024-07-23 23:14:34
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