Tesla, the CEO Elon Musk–run electric vehicle manufacturer, announced a 20 percent drop in automotive revenue. In reality, sales fell 16% – the second quarter in a row of declining sales. The company’s stock performance has been well below analyst expectations. Yet this surprise is raising alarm bells among investors and crypto watchers.
In the most recent Tesla earnings report, the automaker revealed its quarterly automotive revenue dropped down to $15 billion. That’s $17.8 billion less than at this time last year. The company announced a more than 80% decline in revenue from the sale of auto regulatory credits. They declined to just $439 million, from $890 million over the same span in 2022. These sobering numbers paint a vivid picture of Tesla’s direct challenges as competition in the automotive world accelerates.
Tesla’s latest sales figures indicate that they have trailed analysts’ expectations for the second quarter in a row. As the company continues to calculate the costs of these fiscal failures, industry veterans share a growing worry that Musk’s leadership style is a liability. Dan Ives, a well-known analyst, remarked, “Elon Musk can’t continue to go down this political path.”
Even with these notable challenges, Tesla sets the bar high for continuous innovation. The company recently started testing an autonomous robotaxi service without human backup drivers in Austin, Texas. This pilot program is very localized within the Las Vegas strip and employs a human valet onboard to provide assistance to passengers. Musk has mentioned the delicious profits to be made from robotaxis on numerous occasions. He imagines a future where these vehicles make money for their owners overnight, while they sleep.
“We will further improve and expand the service (more vehicles covering a larger area, eventually without a safety rider) while testing in other U.S. cities in anticipation of additional launches.” – Tesla
Tesla is now behind the eight ball compared to its rivals. Alphabet’s Waymo, for instance, has recently achieved commercially successful robotaxi deployments across multiple U.S. markets including Austin. This competitive landscape underscores the urgent challenge that Tesla faces to enable the rapid development and deployment of autonomous vehicle technology.
As Tesla navigates these operational and financial hurdles, company executives, including Musk, are scheduled to host an earnings call with analysts at 5:30 p.m. ET. This call will be an opportunity for Tesla to quell these concerns and describe how they will move forward.