Newsletter
Tesla reported weaker-than-expected Q2 earnings, even though revenue came in ahead of Wall Street estimates.
By the numbers:
Adjusted earnings per share: 33 cents vs 51 cents expected
Revenue: $28.24 billion vs $25.71 billion expected
Revenue rose 26% YoY, driven by record vehicle deliveries. However, net income fell 5% to $1.11 billion, compared with $1.17 billion in the same quarter last year.
What went wrong: despite strong automotive revenue, Tesla's gross margin missed estimates as the average selling price per vehicle declined and revenue from regulatory credits fell sharply.
Adjusted net income dropped 17% YoY to $1.2 billion, well below Wall Street's expectation of $1.9 billion.
The profit decline came even as Tesla delivered a record 480,126 vehicles during the quarter. Operating expenses rose much faster than revenue as Tesla ramped up spending on artificial intelligence and research and development.
Operating expenses increased 47% to $4.35 billion, while the company's operating margin fell to 1.4%, down from 4.1% a year ago.
What's next for Tesla: Elon Musk is shifting the company's focus beyond electric vehicles and towards AI and robotics. Tesla is ramping up production of its autonomous Cybercab, while also retooling its Fremont factory to manufacture Optimus, its humanoid robot.
Musk has repeatedly said Optimus could one day work as a factory worker, babysitter or even a world-class surgeon.
