Tesla experienced a notable increase in revenue in the second quarter of 2024. But, despite this growth, the company's profits saw a significant decline.
Increased Turnover, Falling Profit
Tesla reported a net income of $1.5 billion this quarter, which is down 45 percent compared to the $2.7 billion in the same period last year.
The company's revenue for the second quarter reached $24.7 billion, an increase from $24.1 billion in the same quarter the previous year.
This revenue exceeded analysts' expectations, which, according to Reuters, were set at $24.1 billion.
Despite the positive revenue development, Tesla's share price fell by 2.5 percent following the publication of the accounts.
A major factor behind the declining profit is Tesla's extensive investments in AI and other technologies. Tesla states that these investments have had a notable impact on their bottom line. For example, earlier this month, a planned robot taxi event was postponed indefinitely.
Sales Declines
Tesla has implemented several price cuts on their cars, which have helped increase their profit margin from 5.5 percent in the first quarter to 6.3 percent in the second quarter.
But the sales of electric cars have faced challenges, with a 4.8 percent drop in the second quarter and an 8.5 percent drop in the first quarter.
Tesla's strategy of investing in advanced technology, such as AI and self-driving cars, could prove to be transformative in the long term. However, it is evident that the short-term financial challenges require a careful and balanced approach.
