Austin: Tesla shares experienced their steepest drop since 2020 after the electric vehicle manufacturer revealed quarterly earnings that fell short of expectations, along with another decrease in automotive revenue.
As per reports, the stock closed down 12 percent on Wednesday, settling at 215.99 dollars. This brings its decline for the year to 13 percent, contrasting sharply with the Nasdaq's 16 percent increase over the same period.
On Tuesday, Tesla reported a 7 percent year-over-year decline in auto revenue, amounting to 19.9 billion dollars, accompanied by a drop in margins. Although total revenue saw a modest 2 percent increase, reaching 25.5 billion dollars, the company has been compelled to reduce prices globally and offer discounts and incentives to combat slowing sales and intensified competition, particularly in China. Despite remaining the leading electric vehicle seller in the U.S., Tesla is losing market share to a growing array of competitors, partly due to its aging lineup of sedans and SUVs and CEO Elon Musk’s controversial and political statements.
Adjusted earnings for the second quarter stood at 52 cents per share, missing the average analyst estimate of 62 cents as reported by LSEG. Additionally, Tesla’s adjusted operating margin dropped to 14.4 percent, its lowest in three years, down from 18.7 percent a year ago. This marks the fourth consecutive quarter of margin decline.
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