Tesla shares fall 11% on disappointing second-quarter profits

Tesla shares fell by about 11% during trading on Wednesday, affected by the decline in the American electric car maker’s profits in the second quarter of 2024 by more than 40% compared to last year.

Tesla shares fell to $214.71 earlier in trading, before rising slightly to $219.58 at 3:53 pm GMT, according to Refinitiv data, pushing the company’s shares to record a loss of 11.52% since the beginning of this year until now.

According to CNN, the decline in the stock is mainly due to Tesla’s announcement of recording income of $1.8 billion in the second quarter, or the equivalent of 52 cents per share, less than analysts’ expectations of recording 61 cents per share, and below the profit of 91 cents per share that it achieved in the same quarter of the year. Year 2023.

This is the second consecutive quarter in which the company recorded a decline in its sales on an annual basis, and Tesla did not set a new sales target for the full year, but it warned that in 2024, the growth rate of car sales may be significantly lower than the growth rate achieved in 2017. 2023.

This comes as the American company faces intense competition from automakers inside and outside the United States, especially in China, in addition to the slowdown in overall growth in electric car sales.

Tesla is also facing federal investigations into some of CEO Elon Musk’s claims about the company’s cars’ full self-driving capabilities, after facing a Department of Justice investigation in the past, but it is unclear what the current status of this investigation is.

Musk has already announced the suspension of Tesla’s plans to build an assembly plant in Mexico, but he said that the plans were temporarily halted until after the presidential elections due to Republican candidate Donald Trump’s threat to impose tariffs on vehicles imported from Mexico.

Trump pledged to impose similar tariffs on cars made in Mexico in 2019, when he was president, but he never implemented it. However, Musk is currently considered one of Trump’s most prominent supporters, and reports have been published saying that he pledged tens of millions of dollars to the former president’s re-election efforts.