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
Trump says Zelensky ‘isn’t ready’ yet to accept US-authored proposal to end Russia-Ukraine war
- Trump said he was “disappointed” and suggested that the Ukrainian leader is holding up the talks from moving forward
- He also claimed Russia is “fine with it” even though Putin last week had said that aspects of Trump’s proposal were unworkable
KYIV, Ukraine: President Donald Trump on Sunday claimed Ukrainian President Volodymyr Zelensky “isn’t ready” to sign off on a US-authored peace proposal aimed at ending the Russia-Ukraine war.
Trump was critical of Zelensky after US and Ukrainian negotiators completed three days of talks on Saturday aimed at trying to narrow differences on the US administration’s proposal. But in an exchange with reporters on Sunday night, Trump suggested that the Ukrainian leader is holding up the talks from moving forward.
“I’m a little bit disappointed that President Zelensky hasn’t yet read the proposal, that was as of a few hours ago. His people love it, but he hasn’t,” Trump claimed in an exchange with reporters before taking part in the Kennedy Center Honors. The president added, “Russia is, I believe, fine with it, but I’m not sure that Zelensky’s fine with it. His people love it it. But he isn’t ready.”
To be certain, Russian President Vladimir Putin hasn’t publicly expressed approval for the White House plan. In fact, Putin last week had said that aspects of Trump’s proposal were unworkable, even though the original draft heavily favored Moscow.
Trump has had a hot-and-cold relationship with Zelensky since riding into a second White House term insisting that the war was a waste of US taxpayer money. Trump has also repeatedly urged the Ukrainians to cede land to Russia to bring an end to a now nearly four-year conflict he says has cost far too many lives.
Zelensky said Saturday he had a “substantive phone call” with the American officials engaged in the talks with a Ukrainian delegation in Florida. He said he had been given an update over the phone by US and Ukrainian officials at the talks.
“Ukraine is determined to keep working in good faith with the American side to genuinely achieve peace,” Zelensky wrote on social media.
Trump’s criticism of Zelensky came as Russia on Sunday welcomed the Trump administration’s new national security strategy in comments by the Kremlin spokesman published by Russia’s Tass news agency.
Dmitry Peskov said the updated strategic document, which spells out the administration’s core foreign policy interests, was largely in line with Moscow’s vision.
“There are statements there against confrontation and in favor of dialogue and building good relations,” he said, adding that Russia hopes this would lead to “further constructive cooperation with Washington on the Ukrainian settlement.”
The document released Friday by the White House said the US wants to improve its relationship with Russia after years of Moscow being treated as a global pariah and that ending the war is a core US interest to “reestablish strategic stability with Russia.”
Speaking on Saturday at the Reagan National Defense Forum, Trump’s outgoing Ukraine envoy, Keith Kellogg, said efforts to end the war were in “the last 10 meters.”
He said a deal depended on the two outstanding issues of “terrain, primarily the Donbas,” and the Zaporizhzhia Nuclear Power Plant.
Russia controls most of Donbas, its name for the Donetsk and neighboring Luhansk regions, which, along with two southern regions, it illegally annexed three years ago. The Zaporizhzhia Nuclear Power Plant is in an area that has been under Russian control since early in Moscow’s invasion of Ukraine and is not in service. It needs reliable power to cool its six shutdown reactors and spent fuel, to avoid any catastrophic nuclear incidents.
Kellogg, who is due to leave his post in January, was not present at the talks in Florida.
Separately, officials said the leaders of the United Kingdom, France and Germany would participate in a meeting with Zelensky in London on Monday.
As the three days of talks wrapped up, Russian missile, drone and shelling attacks overnight and Sunday killed at least four people in Ukraine.
A man was killed in a drone attack on Ukraine’s northern Chernihiv region Saturday night, local officials said, while a combined missile and drone attack on infrastructure in the central city of Kremenchuk caused power and water outages. Kremenchuk is home to one of Ukraine’s biggest oil refineries and is an industrial hub.
Kyiv and its Western allies say Russia is trying to cripple the Ukrainian power grid and deny civilians access to heat, light and running water for a fourth consecutive winter, in what Ukrainian officials call “weaponizing” the cold.
Three people were killed and 10 others wounded Sunday in shelling by Russian troops in Ukraine’s Kharkiv region, according to the regional prosecutor’s office.
