AGS NEWS – Tesla’s second-quarter profits dropped significantly due to price cuts and heavy spending on technology, including autonomous driving.

The company, led by Elon Musk, reported a profit of $1.5 billion, down 45%, on revenues of $25.5 billion, up 2% due to its energy generation and storage business. Tesla’s earnings per share missed analyst expectations, while revenues exceeded them.

Amidst competitive pressures, Tesla has implemented several price cuts and laid off 10% of its global staff, approximately 14,000 workers, to reduce expenses for major investments.

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This restructuring led to one-time expenses of $622 million in the second quarter.

Despite a decline in vehicle sales compared to last year, sales improved from the first quarter, reflecting better consumer sentiment.

Tesla reaffirmed that vehicle volume growth might be lower than last year’s but announced new, more affordable models set for production in the first half of 2025.

The Cybertruck remains on track for profitability by the end of 2024. Tesla continues to invest in AI and autonomous driving, postponing a robotaxi event to October to enhance the product.

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Musk expects the robotaxi to achieve full autonomy by the end of 2024.

Tesla’s stock has been flat in 2024. CFRA analyst Garrett Nelson downgraded Tesla to “hold,” citing a lack of near-term catalysts due to the robotaxi event delay.