Tesla Wahala: Profit Drop and Robotaxi Delay
Di image show electric car battery charging station, wey dey symbolize TESLA investment for electric mobility and challenges for di industry.
You don hear say Tesla don report serious drop for their second-quarter profit? E be like say di company dey face wahala after them don slash vehicle prices and dey spend money like say dem dey buy out di whole market.
For di second quarter of 2024, Tesla report say dem make $1.5 billion profit. But wait o, dis profit don drop by 45 percent compared to di same period for last year. Di company also report revenue of $25.5 billion, wey still dey show small increase of two percent. Dis small increase na because of di boost in their energy generation and storage business. But despite di revenue don increase, di profit drop na wahala.
Elon Musk, di oga for Tesla, don talk say di company dey face serious competition from other electric vehicle makers, na why dem don cut prices for their vehicles. Dis price cut no just affect their profit, e still lead to some job cuts. Dis year alone, Tesla don lay off about 14,000 workers, wey be 10 percent of their global staff. Dem do dis to reduce expenses so that di money fit go into new investments.
Chief Financial Officer Vaibhav Taneja talk say dis reorganization don cause one-time expenses of $622 million in di second quarter, due to severance and other costs wey come from di layoffs. E no be small matter.
Even though vehicle sales don drop when you compare am to di same time last year, e don improve small from di level wey e dey for di first quarter. Tesla don talk say dis increase na because overall consumer sentiment don better.
However, Tesla still dey expect say di growth in vehicle volume go dey “notably lower” than last year. But di company don announce say dem go start production for new, more affordable models by di first half of 2025. Elon Musk don talk dis one since April, and Wall Street dey cheer di news, but di man no talk plenty details about di new models. He don say we go need wait for product launch event to get more gist.
Di Cybertruck wey don become like di face of Tesla still dey on track to start making profit by di end of 2024 as dem dey ramp up production. Na di same way dem dey focus on technological advancement, especially for artificial intelligence and autonomous driving.
But no be everything dey go smooth for Tesla. Di company don delay di much-expected robotaxi event from August to October. Dem talk say di timing of di robotaxi deployment go depend on how technology dey develop and di regulatory approval. Di delay go allow dem improve di robotaxi and add some new features before di product unveil on October 10.
Elon Musk don get history of making big claims about autonomous vehicles. E don talk say conventional cars go soon be like di old horse and buggy, but e don fail to meet di earlier projections. Di man don admit say him don too optimistic before, but e dey hope say di robotaxi go fit achieve full autonomy by di end of 2024. He even talk say he go dey shocked if di technology no ready next year.
On di political side, di financial results come at a time when Elon Musk don increase him involvement in electoral politics. Di man don openly support Donald Trump for di 2024 presidential election, despite say Trump dey deny climate change wey na one of Musk’s priorities. Musk don endorse Trump on July 13, after a shock assassination attempt on di Republican presidential nominee.
Musk don also agree to donate $45 million monthly to America PAC, wey dey focus on electing Trump, starting from July. But di plan to build new Gigafactory for Mexico fit dey affected if Trump win di election, because Trump don vow to impose heavy tariffs on Mexican goods. Musk don say we go need see how di election go be before dem decide.
Heading into di earnings announcement on July 23, Tesla shares don dey flat for 2024. Analyst Garrett Nelson don downgrade Tesla to “hold” after him don dey urge to buy di shares. Even though Nelson still believe in di long-term vision for Tesla, he don cite di lack of near-term catalysts due to di robotaxi delay as di reason.
After di earnings report, Tesla shares don fall by 7.8 percent for after-hours trading. Di fall in shares and di profit drop don show say di company dey face serious challenges. You go need watch how Tesla go tackle dis issues and whether dem go fit meet their promises in di near future.
