Tesla’s profits sank sharply in the second quarter of 2024

Tesla published its second quarter earnings report, in which the company said it earned $1.48 billion in net income on $25.5 billion in revenue. That represents a 2 percent increase year over year compared to $24.9 billion in revenue in Q2 2023 but a 45 percent drop in net income.

Tesla’s gross margins were in the spotlight again, as bullish investors hoped to see improvements after years of steady decline. Rampant price cutting and cooling demand as well as cheaper financing have pushed the company’s once-vaunted margins to their lowest point in six years.

The company reported 18 percent gross margins based on generally accepted accounting practices, slightly more than the 17.4 percent reported last quarter but down slightly from Q2 2023.

In its letter to shareholders, Tesla celebrated the fact that “EV penetration returned to growth” globally, which the company said was attributable to improving sentiments from customers.

“We believe that a pure EV is the optimal vehicle design and will ultimately win over consumers as the myths on range, charging and service are debunked,” Tesla said.

The news comes after a better-than-expected delivery and production report earlier this month, which sent the company’s stock soaring. Tesla is producing and delivering fewer vehicles than it did a year ago — 4.76 percent and 14 percent, respectively — but it still beat expectations on Wall Street, which had been anticipating far worse numbers.