Acknowledging the Impact of Eliminating EV Subsidies and Other Challenges
Elon Musk, CEO of Tesla, stated, "We expect to offer autonomous vehicle ride-hailing services to about half of the U.S. population by the end of this year."
On the 23rd (local time), during a conference call following the earnings announcement, CEO Musk said, "We plan to launch the service in the Bay Area (San Francisco), as well as several regions in Arizona and Florida, after receiving regulatory approval."
Musk also predicted that approval for the sale of supervised autonomous driving software in parts of Europe would be granted within this year. He said, "Once we can provide the same experience to European customers as we do in the U.S., sales in Europe will improve significantly." He emphasized, "If Tesla continues to excel in autonomous driving and humanoid robots, it will become the most valuable company in the world."
However, Tesla acknowledged the impact of the Trump administration's elimination of electric vehicle purchase subsidies (tax credits) and the reduction in revenue from the sale of credits due to relaxed emissions regulations. Vaibhav Taneja, Chief Financial Officer (CFO), said, "Due to the elimination of the $7,500 EV tax credit, we limited vehicle supply in the U.S. this quarter," and added, "The changes in emissions standards will also affect new regulatory credit sales."
CEO Musk also admitted, "We may have a tough time for a few quarters," but projected that if the scale of autonomous driving expands by the end of 2026, the issue of electric vehicle pricing could be resolved. Regarding the timeline for mass production of affordable new vehicles, he commented, "Due to additional complexities in ramping up new products, mass production in the next quarter will proceed more slowly than initially expected."
Meanwhile, CFO Taneja announced that Tesla's valuation gains and losses on Bitcoin holdings shifted from a loss of $125 million in the first quarter to a profit of $284 million in the second quarter.
On this day, Tesla reported second-quarter revenue of $22.496 billion, a 12% decrease compared to the same period last year. During the same period, earnings per share (EPS) also fell 23% to $0.40. Both revenue and EPS fell short of Wall Street's average estimates compiled by financial information provider LSEG (revenue of $22.74 billion and EPS of $0.43).
Tesla's stock price closed at $332.56 on the New York Stock Exchange, down 0.14% from the previous session. After the earnings announcement, shares initially rose slightly in after-hours trading before reversing to close down 4.44% at $317.80.
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