Tesla on Tuesday reported a significant drop in profit in the three-month period between April and June, a result of the electric car company’s sluggish sales.
The automaker said it earned $1.5 billion in the second quarter of the year on revenue of $25.5 billion. In the second quarter of 2023, Tesla made $2.7 billion and had revenue of $24.9 billion.
The company’s current operating profit margin, a measure of how much money it makes on every dollar of revenue, was 6.3 percent, compared with 9.6 percent in the same period a year ago.
The results will most likely heighten pressure on Tesla and its chief executive, Elon Musk, to show that the company can find new ways to grow and make money.
Tesla shares have jumped 40 percent since the end of the May in large part because investors are betting that Mr. Musk will successfully remake Tesla into an artificial intelligence company that operates a driverless taxi service and sells robots that can efficiently perform manufacturing and other tasks.
“While we continue to execute innovations to reduce the cost of manufacturing and operations, over time, we expect our hardware-related profits to be accompanied by an acceleration of A.I., software and fleet-based profit,” Tesla said in a statement.
The company’s profit in the second quarter was lower than what Wall Street analysts had expected, and Tesla’s stock fell about 5 percent in extended trading on Tuesday after its earnings report.
But it is unclear whether those new businesses will come up to speed fast enough to make up for Tesla’s weakening car sales. Several companies, including Google’s parent Alphabet, have been developing driverless taxis for many years but are only offering rides in a few cities.
Sales of Tesla’s electric cars fell 4.8 percent in the second quarter, to 444,000 vehicles from the same period a year earlier. Production in the period declined 14 percent, to about 411,000 cars.
The second quarter’s setback comes after Tesla reported a 55 percent drop in profit and 9 percent decline in revenue in the first three months of 2024.
The company is facing increasing competition from other manufacturers, which have ramped up production of electric models. Tesla’s share of electric vehicle sales in the United States fell in the second quarter to below 50 percent for the first time, according to Cox Automotive, a research firm.
From April through June, Tesla accounted for 49.7 percent of electric vehicles sales in the United States, down from 59.3 percent a year earlier, Cox said. Ford Motor said this month that it sold nearly 24,000 E.V.s in the second quarter, far fewer than Tesla but a 61 percent increase from a year ago. General Motors’ sales of battery-powered models rose 40 percent, to nearly 22,000 vehicles.
Separately, G.M. said on Tuesday that it made $2.9 billion in the second quarter, a 14 percent increase from a year ago. Its operating profit margin, at 9.3 percent, outpaced Tesla’s, a rare accomplishment for G.M.
Tesla’s slump in sales appears to be at least partly the result of the right-wing politics of Mr. Musk. Tesla’s early customers and fans included many environmentalists and left-leaning consumers, many of them residents of California. Registrations of new Teslas in the state fell 24 percent in the second quarter, according to data published last week by the California New Car Dealers Association.
With its sales slumping, Tesla has been trying to slash costs. In April, Mr. Musk said the company would lay off more than 10 percent of its staff, or about 14,000 people, worldwide. The cuts include 2,000 workers at its plant in Fremont, Calif., and nearly 2,700 at another in Austin, Texas.
It has also cut the prices of its cars, which has reduced the profit it makes on each vehicle it sells. For a time, those cuts helped to lift sales, but now the company is struggling to win over customers even with lower prices.