Tesla Profit Margins Shrink in 2024

Tesla is showcasing its robotaxi, the Cybercab, today in Burbank near Los Angeles. After years of teasing the technology, the event has been called extremely important for the carmaker which now has to deliver on long-made promises. But it is not only high expectations that will have Tesla and CEO Elon Musk under pressure. The company has been struggling in its core market of electric cars amid heightened competition and lackluster deliveries and is looking for new successes.

Tesla 's second-quarter 2024 earnings were down more than 40 percent year-on-year to $1.48 billion, compared with $2.70 billion in Q2 2023. The electric vehicle manufacturer has cut prices to cope with increased competition from other manufacturers and slowing demand while increasing spending on artificial intelligence projects (on-board computers, sensors), all of which caused its profit margin to shrink considerably. While the company's Q3 numbers are still outstanding, it announced that deliveries had been up in the past quarter once more to 462,890.

As the following infographic shows, after peaking at almost 30 percent two years ago, Tesla's profit margin fell below 20 percent at the beginning of last year, then below 15 percent in the second quarter of 2024 (14.6 percent). This is the lowest profit margin recorded by the company in over five years.

Originally by: Tristan Gaudiaut