Earnings at Tesla almost halved as discounts and price cuts pile pressure on the electric carmaker’s profit margins.
Elon Musk, the company’s CEO, blamed “a bit of a hangover” after rivals cut prices “very substantially, which has made it a bit more difficult for Tesla”.
Tesla has sought to drum up interest in its plans for robotaxis, artificial intelligence and “genuinely useful” humanoid robots as deliveries slipped amid cooling demand.
Production of the carmaker’s next-generation Roadster sports car is scheduled to begin next year, Musk said on a conference call with investors on Tuesday.
He also said he would be “shocked” if Tesla does not introduce “unsupervised” self-driving software by 2025, and claimed that “several thousand” Optimus robots will be deployed in the company’s factories next year, before it starts manufacturing them for wider use.
Its latest results underlined the challenges Tesla has faced in recent months, however. Total sales at the business rose 2% to $25.5bn in the latest quarter, ahead of expectations of $24.8bn on Wall Street. But profits dropped 45% to $1.48bn.
Shares in Tesla dropped 6.9% during out-of-hours trading in New York. “We don’t see this as a long-term issue,” Musk said of discounting in the electric vehicle market, “but really fairly short-term.”
Musk, the world’s richest man, has in recent weeks endorsed Donald Trump for president and reportedly plans to donate tens of millions of dollars to back his campaign.
“I’m not suggesting that Trump is without flaws,” he wrote on Sunday. “However, we need an administration that is more likely to be meritocratic and promote individual freedoms over the heavy hand of government.”
Musk, who also leads SpaceX, the rockets and satellites business, and controls X, the social network formerly known as Twitter, declared earlier this month that both companies would follow Tesla by relocating their headquarters from California to Texas. He cited California’s new law banning school transgender notification requirements as one of the reasons for the move.
Shareholders in Tesla, which is based in Austin, approved a $45bn pay deal for Musk in June, following a fiercely contested referendum on his leadership.
Dan Ives, analyst at Wedbush, said ahead of Tesla’s latest results that the company had “clear momentum” and was on track “over the coming quarters” to build up production to an annual rate of 2 million vehicles, citing stabilization of worldwide demand.
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