In Q2, Tesla's total revenue increased by 2%, with its energy business revenue doubling and hitting a new high, while its automotive business revenue decreased by 7%. Its EPS and net income decreased by over 40%, with its "sell-carbon" revenue doubling to a new record of $0.89 billion. Tesla still expects Cybertruck to be profitable by the end of this year, and expects automotive production to rebound sequentially in Q3, with new models such as affordable cars expected to start production in the first half of next year. Cutting costs and accelerating the development of AI products and services are still the company's priorities, and the deployment of Robotaxis depends on technology and regulation. Musk confirmed media reports that Robotaxis would be delayed until October, and that affordable cars will be delivered in the first half of next year.
$Tesla (TSLA.US)$In the second quarter, overall revenue unexpectedly increased, thanks to the growth of energy business. However, sales of main business autos still continued to decline, and the company's profit dropped by more than expected, reflecting the ongoing impact of car price reductions and increased investment in the field of artificial intelligence (AI) on profitability.
There was no new information disclosed in this Tesla financial report regarding the release schedule of the Robotaxi. However, Tesla CEO Musk confirmed previous media reports during the earnings conference call, stating that the plan to release Robotaxi has been postponed from August 8 to October 10.
After the Q2 financial report was released, Tesla's stock price fell approximately 2% on Tuesday and accelerated its decline after-hours, with a drop of over 4%. During the conference call, the stock price dropped even further, ultimately falling by nearly 8%.
In the second quarter, the total revenue increased instead of decreasing, while the revenue from energy business doubled and revenue from the automotive business decreased by 7%. The net profit decreased more than 40%.
After-market trading on Tuesday, July 23th, Tesla announced that its total revenue for the second quarter of this year was higher than expected, and that operating profit and earnings per share (EPS) both decreased by double digits, exceeding market expectations.
In the second quarter, revenue was $25.5 billion, a year-on-year increase of 2%, which is higher than analysts' expectations of a year-on-year decline to $24.109 billion. Among them, the revenue of the auto business was $19.878 billion, a year-on-year decrease of 7%, while the revenue of the energy generation and storage business doubled to $3.014 billion year-on-year.
In the second quarter, the operating profit was USD 1.605 billion, a year-on-year decrease of 33%. Analysts expected a year-on-year decrease of 24.6% to USD 1.81 billion.
In the second quarter, the non-GAAP diluted EPS was USD 0.52, a year-on-year decrease of 43%. Analysts expected USD 0.60, a year-on-year decrease of 34%.
In the second quarter, the gross profit was USD 4.578 billion, an increase of 1% year-on-year. The gross profit margin for the quarter was 18%, lower than the 18.2% in the same period last year, but higher than the analyst expectation of 17.4%; the gross profit margin for the automotive business, which excluded the sale of carbon credits, was 14.6% which was lower than expected.
In the second quarter, the non-GAAP net income was USD 1.812 billion, a year-on-year decrease of 42%. GAAP net income was USD 1.478 billion, a year-on-year decrease of 45%.
In the second quarter, the free cash flow (FCF) was USD 1.342 billion, a year-on-year increase of 34%, while analysts expected USD 1.92 billion, a year-on-year increase of 91%.
Tesla claims that it achieved record total revenue in the second quarter while highlighting the bright spots of its energy business. Tesla's financial report disclosed that in the second quarter, it deployed 9.4Gwh of storage products, including Megapack and Powerwall, achieving a record-high quarter. The revenue and gross profit of the energy generation and storage business both set new quarterly highs.
Regarding the energy generation and storage business, Tesla also mentioned that the storage factory in Lathrop, California achieved its highest quarter production, while the Shanghai Super Factory is on track to start production in the first quarter of next year.
Tesla still expects Cybertruck to be profitable by the end of this year, and forecasts that the automotive production growth rate will turn positive in Q3, with new cars including affordable car models expected to be put into production in the first half of next year.
Earlier this month, Tesla announced that second-quarter deliveries fell by 4.8% year-on-year, declining for the second consecutive quarter, but the decline was lower than market expectations, preserving its status as the world's top-selling electric vehicle.
In this financial report, when analyzing the factors that affect profitability in the second quarter, Tesla pointed out that the negative factors that affect profitability include the increase in operating expenses mainly from the AI project, the decrease in car deliveries and average selling prices (ASPs), and the related costs of restructuring. However, Tesla listed the Cybertruck deliveries as positive revenue factors, along with the growth of energy business.
Tesla stated that the company's vehicle production volume decreased quarter-on-quarter in the second quarter, and it is expected to increase in the third quarter. The production volume of Cybertruck in the second quarter has more than doubled quarter-on-quarter and is still on track to achieve profitability by the end of this year. The electric semi-trailer Semi factory is on track to start production by the end of 2025.
Looking ahead, Tesla reiterated in the same way as its first-quarter financial report that due to its commitment to launching new generation cars and other products, the growth rate of automobile production this year may be 'far lower' than last year, reiterating that this year's deployed energy storage product and energy business revenue growth rate may exceed the automobile business.
Looking forward, Tesla stated that, including more affordable models, Tesla's new car plan is still expected to start production in the first half of next year. These vehicles will use the next-generation platform as well as the existing platform, and can be manufactured on the same production line as the current models. This method will lead to a lower cost reduction than previously expected but will enable the company to prudently increase automobile production in an efficient capital expenditure manner during uncertain times. This will help the company fully utilize the maximum capacity of nearly 3 million cars expected to be achieved before investing in new production lines, increasing production by more than 50% from last year.
Carbon offset income doubled quarter-on-quarter to a new record in the second quarter.
One of Tesla's major profit drivers in the past-selling carbon credits-income has made a comeback in the second quarter. This type of so-called 'carbon offset' income reached a record-breaking $0.89 billion in revenue for the quarter, more than double the revenue of $0.442 billion in the first quarter.
When announcing the financial report, Tesla confirmed the achievement of 'carbon offset':
'We achieved record regulatory credit revenue in the second quarter, as other OEMs lagged in meeting their emissions requirements.'
The emphasis is still on reducing costs throughout the company, accelerating the development of AI products and services, and the timing of the Robotaxi deployment depends on technology and regulation.
After Tesla announced its delivery volume this month, many investment banks such as Citigroup and Mizuho raised their target price for Tesla and said that Tesla's future growth mainly comes from the execution of the AI project, especially Robotaxi and humanoid robots. A survey released by Morgan Stanley last weekend showed that investors are more concerned about Tesla's 'AI narrative' than electric vehicles, with 68% of investors seeing AI as the main driving force of Tesla's stock price in the next year and only 33% inclined to electric vehicles.
The specific plan release time for Robotaxi was not disclosed in the financial report released this Tuesday, Tesla said:
'The timing of the Robotaxi deployment depends on technological progress and regulatory approval. Given its huge potential value, we are actively seizing the opportunity.'
In the financial report, Tesla summarized:
'Our focus remains on reducing costs throughout the company, including lowering the sales cost per vehicle, developing our traditional hardware business, and accelerating the development of our AI products and services.'
Regarding AI software and hardware, Tesla mentioned that it continues to make progress in the development of software and hardware for autonomous driving and Robotaxi services. Optimus is performing its first battery processing task in one of Tesla's factories. The southern expansion of Tesla's Texas Super Factory is about to be completed, accommodating the company's largest H100 chip cluster to date.
Looking ahead, Tesla mentioned that the Robotaxi product will continue to implement the revolutionary 'deconstructed' manufacturing strategy.
Netizens commented on Tesla's performance highlights in the fields of cars and AI, stating that Tesla told us that sales continued to plummet, so I am turning to hot concepts such as AI, and so on.
Some netizens pointed out that the year-on-year performance in the last column of Tesla's second quarter performance report was really bad. No wonder Musk often fabricates lies. Tesla's actual value is not even up to $20 per share.
Editor/Somer