NEW YORK: The fallout from Elon Musk’s plunge into politics a year ago is still hammering his Tesla business as both sales and profits dropped sharply again in the latest quarter.
The car company that has faced boycotts for months said Wednesday that revenue dropped 12 percent and profits slumped 16 percent in the three months through June as buyers continued to stay away.
“The perception of Elon Musk, its chief executive, has rubbed the sheen right out of what once was a darling and soaring automotive brand,” wrote Forrester analyst Dipanjan Chatterjee in an email. Tesla is “a toxic brand that is inseparable from its leader.”
Quarterly profits at the electric vehicle, battery and robotics company fell to $1.17 billion, or 33 cents a share, from $1.4 billion, or 40 cents a share. That was the third quarter in a row that profit dropped. On an adjusted basis, the company said it earned 40 cents a share, matching Wall Street estimates.
Revenue fell from $25.5 billion to $22.5 billion in the April through June period, slightly above Wall Street’s forecast.
Tesla shares were little changed in after-hours trading as investors wait to hear from Musk on the company’s earnings call later in the afternoon.
Musk, who helped elect President Donald Trump with a massive campaign donation and then headed his DOGE cost-cutting program, has been pinning the future of the company less on car sales and more on robotaxis, automated driving software and robotics. But those businesses are yet to take off, and the gap between promise and profits was apparent in the second quarter.
A big challenge is that potential buyers not just in the US but Europe are still balking at buying Teslas. Musk alienated many in the market for cars in Great Britain, France, Germany and elsewhere by embracing far-right candidates for office on the continent. And rival electric vehicle makers such as China’s BYD and German’s Volkswagen have pounced on the weakness, stealing market share.
Tesla began a rollout of its paid pickup robotaxi service in Austin, Texas, and hopes to introduce the driverless cabs in several other cities soon. Musk has said he expects to have hundreds of thousands of the cabs on US roads by the end of next year.
In a conference call after the results were announced, Musk said the service will be available to probably “half of the population of the US by the end of the year — that’s at least our goal, subject to regulatory approvals.”
He added, “We are being very cautious. We don’t want to take any chances.”
The test run in Austin has mostly gone off without a hitch, though there have been a few alarming incidents, such as when a robotaxi went down a lane meant for opposing traffic.
With driverless taxis, though, the billionaire who upended the space race and the EV manufacturing faces tough competition. The dominant provider now, Waymo, is already in several cities and recently logged its ten-millionth paid trip.
Meanwhile other threats loom. The new federal budget just passed by Congress eliminates a credit worth as much as $7,500 for buying an electric car. It also wipes out penalties for car makers to exceeding carbon emission standards. That threatens Tesla’s business of selling its “carbon credits” to traditional car companies that regularly fall short of emission standards.
Tesla generated $439 million from credit sales, down sharply from $890 million a year ago.
One way to boost sales that Musk has long promised: A cheaper model. The company now is planning to introduce that to the market in the last three months of the year. Tesla had previously said that was going to happen by June this year.
“It appears management’s focus will now shift to robotaxis and away from deliveries growth,” said Morningstar analyst Seth Goldstein, referring to the car sales.
“If Tesla continues to execute well with vehicle autonomy and humanoid robot autonomy,” Musk said in his remarks, “it will be the most valuable company in the world.”
Musk also said he expected regulatory approval to introduce its so-called Full Self-Driving software in some parts of Europe by the end of the year. Musk had previously expected that to happen by March of this year. The feature, which is available in the US, is a misnomer because it is only a driver assistance feature.
Gross margins for the quarter, a measure of earnings for each dollar of revenue, fell to 17.2 percent from 18 percent a year earlier.
A highlight from the quarter was from something far removed from cars and robots: the company’s investment in bitcoin. That bet generated a $284 million paper gain, compared with a loss the previous quarter.
Tesla profit plunges in latest quarter as Musk’s turn to politics continues to keep buyers away
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Tesla profit plunges in latest quarter as Musk’s turn to politics continues to keep buyers away
- Faced with boycotts for months, the car company’s profits slumped 16 percent in the three months through June
- Musk also alienated many in the market for cars in Europe by embracing far-right candidates for office on the continent
Ratcliffe says he is sorry his UK ‘colonized by immigrants’ remark offended some
- His comments were condemned by politicians, campaigners and by fan groups at Manchester United
- Muslim Supporters Club said the term “colonized” was frequently used by far-right activists to frame migrants as invaders
LONDON: British billionaire Jim Ratcliffe said on Thursday he was sorry he had offended some people by saying the country had been “colonized by immigrants,” after Prime Minister Keir Starmer joined a chorus of criticism over the remarks.
Ratcliffe, one of Britain’s most successful businessmen, responded to the outcry with a statement saying it was important to raise the issue of immigration, but that he regretted his “choice of language” had caused concern.
The founder of chemicals giant INEOS, and owner of nearly a third of Manchester United, had told Sky News that high migration and people living on benefits were damaging the economy.
Finance minister: Comments were “disgusting”
“You can’t have an economy with nine million people on benefits and huge levels of immigrants coming in. I mean, the UK has been colonized — it’s costing too much money,” Ratcliffe said in the interview aired on Wednesday.
“The UK has been colonized by immigrants, really, hasn’t it?” he added.
Starmer said the remarks were wrong and would play into the hands of those who wanted to divide the country. Finance minister Rachel Reeves said the comments were “unacceptable” and “disgusting.”
On Thursday, INEOS issued a statement from Ratcliffe in response to “reporting of his comments.”
“I am sorry that my choice of language has offended some people in the UK and Europe and caused concern but it is important to raise the issue of controlled and well-managed immigration that supports economic growth,” he said.
He said he wanted to stress that governments must manage migration alongside investment in skills, industry and jobs to ensure long-term prosperity is shared by everyone, and that it was “critical that we maintain an open debate on the challenges facing the UK.”
Starmer’s spokesperson said it was right for him to apologize. Asked if an apology about offense caused rather than the comments themselves were enough, the spokesperson said questions on the detail of the apology were for Ratcliffe.
Manchester United fans flag up use of “colonized”
His comments were condemned by politicians, campaigners and by fan groups at Manchester United, including its Muslim Supporters Club who said the term “colonized” was frequently used by far-right activists to frame migrants as invaders.
“Public discourse shapes public behavior,” the group said. “When influential figures adopt language that mirrors extremist talking points, it risks legitimising prejudice and deepening division.”
Others noted that the Manchester United first team was largely made up of international players and staff, and questioned whether Ratcliffe should be commenting on British politics when he had moved to the tax haven Monaco.
Before Ratcliffe’s response, The Mayor of Greater Manchester Andy Burnham said Ratcliffe’s comments were inflammatory and should be withdrawn.
Immigration debate has intensified
Immigration has consistently been among the top voter concerns in Britain according to opinion polls, and has helped fuel the rise of Nigel Farage’s right-wing populist party Reform UK.
Rhetoric around immigration has hardened in recent years and a wave of protests broke out last summer outside hotels housing asylum seekers. Widespread rioting also occurred in 2024, sparked by false information circulating online that a teenager who killed three young girls was an Islamist migrant.
Sky said Ratcliffe had cited incorrect figures to back up his argument. He said the population had risen from 58 million to 70 million people since 2020. The Office for National Statistics estimates the UK population was 67 million in mid-2020 and 69 million in mid-2024.
The population was around 59 million in 2000. Ratcliffe and his office did not immediately respond to Reuters questions about the figures he used.
Farage responded to the comments by saying that Britain had undergone mass immigration that had changed the character of many areas in the country. “Labour may try to ignore that but Reform won’t,” he said.
