Due to CEO Elon Musk’s political activism, Tesla reported its worst quarterly revenue decline in a decade.
According to its earnings report, which Tesla released following the closing bell on Wall Street, revenue decreased to $ 22.5 billion for the April-June quarter from $ 25.5 billion. According to LSEG data, analysts were anticipating a revenue of $22.74 billion on average.
Sales of cars decreased by 16%. Tesla attributed a decline in vehicle deliveries to the decline in revenue. It reported a 14% drop in second-quarter car deliveries earlier this month.
After he and Donald Trump locked horns over forming a new political party this month, investors are concerned about whether Musk will be able to devote enough time to Tesla. He had previously promised to concentrate on his businesses instead of his government-run ones.
Its reputation was impacted by Musk’s connections to the Trump administration and his administration’s Department of Government Efficiency’s connections. The billionaire’s support of the far-right AfD party in Germany has had an impact on the reputation of the company in Europe.
The concerns are also heightened by a number of well-known executive exits, including the recent departure of a long-time Musk confidant who oversaw sales and manufacturing in North America and Europe.
Despite releasing a much-awaited refreshed version of its best-seller Model Y SUV that investors had hoped would rekindle demand, the company reported a second consecutive quarterly revenue decline.
A large portion of the business’ trillion-dollar valuation depends on its investment in developing humanoid robots through its robotaxi service, which just started its small trial in Austin, Texas, last month. Tesla and the state of Nevada have been in discussions about introducing robot axis services there, according to a report released on Wednesday by Bloomberg News.
Analysts predict that this will help the automaker advance in upcoming years.
In a note to Al Jazeera, an analyst at the financial services company Wedbush Securities, Dan Ives, said, “We are at a “positive crossroads” in the Tesla story: Musk is laser focused as CEO, Robotaxi/autonomous expansion has begun, demand stabilization has begun especially in China, and Tesla is about to embark on an aggressive AI-focused strategy that, in our opinion, will include owning a sizable piece of xAI.
Musk’s AI company, which also produces Grok, produces the chatbot.
Although the numbers for the near-term and this quarter are not compelling, we think Tesla’s investors are instead focused on the future of the AI company, with Musk supporting Tesla’s future, according to Ives.
Source: Aljazeera
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