Tesla's quarterly results miss estimates after price cuts hit bottom line

Tesla's second quarter results missed analysts' estimates for its margin after the company's price-cutting push to stimulate demand had an impact on its bottom line.

Tesla's second-quarter margin missed analysts' estimates as price cuts and incentives to spur sagging demand continued to hurt the bottom line while the company intensifies its self-driving technology efforts, it said on Tuesday.

Tesla recorded automotive gross margin excluding regulatory credits of 14.65% in the second quarter, compared with estimates of 16.29%, according to 20 analysts polled by Visible Alpha.

It was the lowest quarterly margin in more than five years, and shares of the electric-vehicle maker were down about 4% in after-hours trading.

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The results were a reminder of headwinds facing the company in its main auto business, even as CEO Elon Musk reoriented the carmaker to self-driving technology, helping Tesla stock recoup most of its losses this year.

The company on Tuesday reported revenue of $25.50 billion for the three months ended June, compared with $24.93 billion a year earlier. Analysts on average had estimated $24.77 billion, according to LSEG data.

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Tesla's sales of regulatory credits nearly tripled to $890 million in the second quarter from a year earlier.

"Plans for new vehicles, including more affordable models, remain on track for start of production in the first half of 2025," Tesla said in a statement.

Tesla reiterated that cost reductions for new vehicles would be less than expected.

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Net income was $1.48 billion in the second quarter, compared to $2.70 billion a year ago.

Adjusted earnings of 52 cents per share missed the Wall Street consensus of 62 cents, as calculated by LSEG.