Tesla released its second-quarter earnings report. The company said its net profit was US$1.48 billion on revenue of US$25.5 billion. Compared with revenue of US$24.9 billion in the second quarter of 2023, it increased by 2% annually, but net profit fell by 45%.
Tesla’s gross margin is once again in the spotlight, with bullish investors hoping to see improvement after years of steady decline. Sharp price cuts, cooling demand and lower financing costs have pushed the company’s once-vaunted profit margins to their lowest point in six years.
“Electric vehicle penetration resumes growth”
Under generally accepted accounting practices, the company reported gross margin of 18%, slightly higher than the 17.4% reported last quarter but down slightly from the second quarter of 2023.
In a letter to shareholders, Tesla celebrated the fact that “electric vehicle penetration is back on the rise” globally, which it said it attributed to improving customer sentiment.
Tesla said: “We believe that pure electric vehicles are the best vehicle design and will ultimately win over consumers as myths about range, charging and service are debunked.”
A better-than-expected delivery and production report earlier this month sent the company’s shares soaring. Tesla produced and delivered fewer cars than a year ago — down 4.76% and 14%, respectively — but it still beat Wall Street’s expectations, which had expected much worse numbers.
