Tesla Reports 45% Drop in Profits as AI Costs Rise, Vehicle Prices Fall

Tesla (TSLA) reported second-quarter profits dropped 45% from a twelvemonth ago, arsenic costs for improvement of artificial intelligence (AI) projects rose, while nan mean waste value of its vehicles fell. 

The driblet successful profits came contempt a 2% bump successful gross from past twelvemonth to $25.5 billion, supra nan $24.98 cardinal analysts had expected, according to estimates compiled by Visible Alpha.

Lower mean waste value and lower transportation numbers than nan institution reported successful nan 2nd 4th of 2023 impacted nan EV giant's profitability, pinch a reported $1.48 cardinal successful profit, down from $2.7 cardinal past twelvemonth and beneath estimates.

Tesla Focuses connected Cutting Costs, Development of Robotaxi, Lower-Cost Models

Tesla said it has a number of cardinal areas of attraction connected going forward, including reducing nan mean costs per vehicle, on pinch processing projects successful nan AI abstraction for illustration its robotaxi and humanoid robots, which CEO Elon Musk precocious said will beryllium successful "low production" and moving successful Tesla factories by adjacent year. The institution besides said its plans to statesman producing a "more affordable" conveyance by nan first half of 2025 stay connected track.

Investors will beryllium watching nan company's net telephone later Tuesday to spot if Tesla provides a caller day for nan debut of its robotaxis aft Musk said past week that nan arena has been delayed from its first day of Aug. 8.

"Though timing of Robotaxi deployment depends connected technological advancement and regulatory approval, we are moving vigorously connected this opportunity fixed nan outsized imaginable value," nan institution said successful its net release.

Tesla shares were down 4.4% to $235.49 successful extended trading arsenic of 5:10 p.m. ET Tuesday pursuing nan release, aft falling 2% successful nan day's afloat trading session.