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
US, Ukraine officials say they’ll meet for 3rd day after progress on creating a security framework
- Witkoff and Kushner’s talks in Florida with Umerov, Ukraine’s lead negotiator, and Hnatov follow discussions between President Vladimir Putin and the US envoys at the Kremlin on Tuesday
WASHINGTON: President Donald Trump’s advisers and Ukrainian officials say they’ll meet for a third day of talks on Saturday after making progress on finding agreement on a security framework for postwar Ukraine.
The two sides also offered the sober assessment that any “real progress toward any agreement” ultimately will depend “on Russia’s readiness to show serious commitment to long-term peace.”
The statement from US special envoy Steve Witkoff, Trump’s son-in-law Jared Kushner as well as Ukrainian negotiators Rustem Umerov and Andriy Hnatov came after they met for a second day in Florida on Friday. They offered only broad brushstrokes about the progress they say has been made as Trump pushes Kyiv and Moscow to agree to a US-mediated proposal to end nearly four years of war.
“Both parties agreed that real progress toward any agreement depends on Russia’s readiness to show serious commitment to long-term peace, including steps toward de-escalation and cessation of killings,” the statement said. “Parties also separately reviewed the future prosperity agenda which aims to support Ukraine’s post-war reconstruction, joint US–Ukraine economic initiatives, and long-term recovery projects.”
The US and Ukrainian officials also discussed “deterrence capabilities” that Ukraine will need “to sustain a lasting peace.”
Witkoff and Kushner’s talks in Florida with Umerov, Ukraine’s lead negotiator, and Hnatov follow discussions between President Vladimir Putin and the US envoys at the Kremlin on Tuesday.
Friday’s session took place at the the Shell Bay Club in Hallandale Beach, a high-end private golf and lifestyle destination owned by Witkoff’s real estate development company.
Previous diplomatic attempts to break the deadlock have come to nothing and the war has continued unabated. Officials largely have kept a lid on how the latest talks are going, though Trump’s initial 28-point plan was leaked.
Ukrainian President Volodymyr Zelensky said his country’s delegation in Florida wanted to hear from the US side about the talks at the Kremlin.
Zelensky, as well as European leaders backing him, have repeatedly accused Putin of stalling in peace talks while the Russian army tries to press forward with its invasion. Zelensky said in a video address late Thursday that officials wanted to know “what other pretexts Putin has come up with to drag out the war and to pressure Ukraine.”
Speaking to Russian journalist Pavel Zarubin on Friday, Kremlin foreign affairs adviser Yuri Ushakov praised Kushner as potentially playing an important role in ending Russia’s invasion of Ukraine. Ushakov also took part in Tuesday’s talks at the Kremlin.
“If any plan leading to a settlement is put on paper, it will be the pen of Mr. Kushner that will lead the way,” Ushakov said.
The flattering comments about Kushner by the senior Russian official come as Putin has sought to sow division between Trump and Ukraine and Europe at a moment when Trump’s impatience with the conflict is mounting. Putin said his five-hour talks this week with Witkoff and Kushner were “necessary” and “useful,” but some proposals were unacceptable.
Kushner, who is married to Trump’s daughter Ivanka, was a senior adviser to Trump during his first term and was the president’s point person on developing the Abraham Accords, which formalized commercial and diplomatic ties between Israel and a trio of Arab nations.
Kushner has played a more informal role in Trump’s second go-around, but he helped Witkoff close out ceasefire and hostage negotiations between Israel and Hamas this fall. Trump tapped Kushner again to pair up with Witkoff to try to find an endgame to Russia’s invasion of Ukraine.
The European take on the peace talks
Ushakov, who accompanied Putin on a visit to India on Friday, repeated the Russian president’s recent criticism of Europe’s stance on the peace talks. Kyiv’s European allies are concerned about possible Russian aggression beyond Ukraine and want a prospective peace deal to include strong security guarantees.
Kyiv’s allies in Europe are “constantly putting forward demands that are unacceptable to Moscow,” Ushakov told Russia’s state-owned Zvezda TV. “Putting it mildly, the Europeans don’t help Washington and Moscow reach a settlement on the Ukrainian issues.”
French President Emmanuel Macron said Friday that he made progress during a visit to Beijing on getting Chinese leader Xi Jinping’s support for peace efforts.
“We exchanged deeply and truthfully on all points, and I saw a willingness from the (Chinese) president to contribute to stability and peace,” Macron said.
The French president said he stressed that Ukraine needs guarantees that Russia won’t attack it again if a settlement is reached and that Europe must have a voice in negotiations.
“The unity between Americans and Europeans on the Ukrainian issue is essential. And I say it, repeat it, emphasize it. We need to work together,” Macron said.
The latest drone attacks
Russian drones struck a house in central Ukraine, killing a 12-year-old boy, officials said, while long-range Ukrainian strikes reportedly targeted a Russian port and an oil refinery.
The Russian attack on Thursday night in Ukraine’s central Dnipropetrovsk region destroyed the house where the boy was killed and also two women were injured, according to the head of the regional military administration, Vladyslav Haivanenko.
The Ukrainian air force said Russia fired 137 drones of various types during the night.
Ukrainian drones attacked a port and an oil refinery inside Russia overnight as part of Kyiv’s campaign to disrupt Russian logistics, Ukraine’s general staff said.
The drones struck Temriuk sea port in Russia’s Krasnodar region and the Syzran oil refinery in the Samara region, starting blazes, a statement said. Syzran is about 800 kilometers (500 miles) east of the border with Ukraine.
The Russian Defense Ministry said only that its air defenses intercepted 85 Ukrainian drones over Russian regions and Crimea, which Russia illegally annexed in 2014.
