US electric vehicle (EV) giant Tesla’s profit margins have continued to fall as lower demand and price cuts take their toll on the company.
Announced this morning, Tesla recorded net income of US$1.5 billion (A$2.27 billion) through the second quarter of 2024 (April to June), well down on its US$2.7 billion (A$4.08 billion) figure across the same period last year.
According to Reuters, it’s Tesla’s smallest net income margin in more than five years.
Despite this, revenue increased year-on-year from US$24.9 billion (A$37.64 billion) to US$25.5 billion (A$38.55 billion) in the second quarter, above previous Wall Street analyst estimates.
Tesla has previously said it expects to spend about US$350 million terminating approximately 10 per cent of its workforce throughout the second quarter of 2024.
As reported earlier this month, sales experienced a 4.8 per cent drop between April and June compared to the year prior, representing the second three-month period this year Tesla has experienced a year-on-year decrease.
Through the opening six months of the year, Tesla’s 830,766 global deliveries are down 6.6 per cent on the 889,015 global handovers it made in the first half of 2023.
This is despite Tesla offering aggressive price cuts around the world in recent months, resulting in the Australian price of entry to its best-selling Model Y SUV and Model 3 sedan falling by $9500 and $7000 respectively since March.
Reuters reports the average profit Tesla makes per vehicle has slid from almost US$18,000 (A$27,220) to about US$8300 (A$12,550) between the start of 2022 and mid 2024.
However, the EV specialist said in January that it expected this to occur due to renewed focus on new products.
“In 2024, our vehicle volume growth rate may be notably lower than the growth rate achieved in 2023, as our teams work on the launch of the next-generation vehicle at Gigafactory Texas,” Tesla said in a statement earlier this year.
One of these new products is an autonomous robotaxi – expected to be called Cybercab – which was expected to be twinned with a highly anticipated US$25,000 (A$37,000) small EV.
While the future of the cheap EV is unknown amid reports it has been cancelled, the robotaxi’s launch has been delayed, initially slated for August 8 and now pushed back until October, according to Bloomberg.
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