Tesla's latest earnings report revealed a significant miss on investor expectations, with adjusted earnings margins dropping from 18.7% to 14.4% year over year.
The company fell short of analyst expectations for free cash flow by more than half a billion dollars, raising concerns about its financial health.
Tesla's earnings per share (EPS) dropped from $0.91 to $0.52 compared to the same quarter last year, indicating a substantial decline in profitability.
Elon Musk faced several tough questions from investors and analysts, particularly about declining auto sales revenue, Robotaxi delays, and the strategy for releasing new models.
Musk's diversion of resources to his AI startup, xAI, sparked concern among investors. He justified the move by stating it was in Tesla's best interest.
Following the earnings call, Tesla's shares dropped over 7% in after-hours trading, reflecting investor unease.
Musk acknowledged increasing competition in the EV market, especially from Chinese manufacturers who have been aggressively pricing their vehicles.
Tesla's profit margins were reported to be the worst in five years, exacerbated by a 10% increase in expenditures primarily driven by investments in artificial intelligence.