Tesla Q2 Net Profit Dips 5% to $1.1 Billion as Robotaxi Rollout Proceeds Cautiously

Tesla released its second-quarter earnings report on July 22. Global vehicle deliveries for the quarter rose 25% year-over-year to 480,126 units, while total revenue increased by 26% to $28.2 billion. Automotive revenue grew 23% to $20.5 billion. Despite the growth in deliveries and revenue, net income declined 5% year-over-year to $1.1 billion, falling short of Wall Street expectations, due to a decline in automotive gross margins and higher capital expenditures related to artificial intelligence (AI) initiatives. The automotive gross margin came in at 16.3%, below the expected 18%. Tesla plans to invest more than $25 billion in 2024, focusing on AI-driven new businesses such as autonomous robotaxis and humanoid robots. Its robotaxi service is currently operating in six cities—Austin, Dallas, and Houston in Texas, and Miami, Orlando, and Tampa in Florida—and is preparing to expand to Phoenix and Las Vegas. The service currently uses modified Model Y vehicles, while the dedicated Cybercab model has already entered production and is undergoing testing, after which it will be integrated into the operational network. During the earnings call, CEO Elon Musk described 2024 as a year of significant capital investment and emphasized the need for caution in rolling out robotaxis to avoid traffic accidents and potential regulatory restrictions. Following the earnings release, Tesla’s stock fell approximately 4% in after-hours trading.