Tesla Stock Falls 11% After Earnings Report Disappoints

Tesla shares headed for their steepest decline since January after the electric vehicle maker reported lower-than-expected quarterly earnings and another drop in automotive revenue.

The stock fell 11% to $219.58 by Wednesday morning. It is now down 12% for the year, while the Nasdaq is up 17% for the sector.

Tesla said Tuesday that auto revenue fell 7 percent to $19.9 billion from a year earlier, while margins also fell. Total revenue rose 2% to $25.5 billion.

The company has been forced to cut prices globally and offer discounts and incentives as it faces sluggish sales and increased competition, particularly in China.

Tesla is by far the biggest seller of electric vehicles in the U.S., but its aging lineup of sedans and SUVs and the impact of Musk’s incendiary and political comments have led it to lose market share to a growing number of rivals. Losing share.

Adjusted earnings of 52 cents per share for the second quarter beat the average analyst estimate of 62 cents, according to LSEG. And Tesla’s adjusted operating margin fell to its lowest in three years, down from 18.7 percent a year ago to 14.4 percent. This is the fourth consecutive quarter of contraction.

Investors have focused on a number of other areas surrounding Tesla’s story, including when the company will introduce a new mass-market car to reinvigorate its vehicle lineup. Musk said on Tuesday’s earnings call that Tesla is on track to deliver a new “affordable” car in the first half of next year.

Robotaxis was a big topic on the earnings call. Musk envisions a world in which owners can allow their Tesla vehicle to be used as part of an Uber-style ride-hailing service, with cars driving autonomously.

When asked when he expected the first robotaxi ride, Musk said, “I’d be surprised if we can’t do it next year.”

Musk has a history of promising things and not delivering on a certain timeline. On Tuesday, he pushed back the date of the company’s Robotaxis event to October, after previously saying it would take place in August.

“It’s because I wanted to make some significant changes that I think will make the car better,” Musk said, adding that Tesla is “going to show other things.” He did not provide details.