Tesla shares fell sharply on Thursday, dropping more than 8% in early trading after the electric vehicle giant reported a decline in quarterly profits and CEO Elon Musk warned of continued turbulence ahead.
By 1415 GMT, Tesla stock was trading at $304.15, down 8.4%, reflecting investor concern after the company announced second-quarter net profits of $1.2 billion, a 16% decrease from the same period last year and the third consecutive quarter of falling earnings.
Speaking during an earnings conference call, Musk cautioned that the company could face “a few rough quarters” as it navigates through a challenging transition phase. He attributed the short-term financial pressure to delays in monetizing Tesla’s new autonomous transportation ventures.
The situation is further complicated by the looming expiration of a $7,500 federal tax credit for electric vehicle purchases, set to end on September 30 under legislation signed by President Donald Trump. Tesla expects a drop in demand once the incentive is withdrawn.
Despite Musk’s past financial support for Trump, donating more than $270 million to his 2024 campaign, tensions between the two billionaires have been public. Trump has previously floated the idea of deporting Musk but appeared to soften his stance Thursday.
In a post on his social media platform, Trump wrote, “I want Elon, and all businesses within our Country, to THRIVE, in fact, THRIVE like never before! The better they do, the better the USA does, and that’s good for all of us.” He added that he would not “destroy” Musk’s business by withdrawing subsidies.
Still, the path forward for Tesla remains uncertain, with Musk emphasizing that the company’s long-term outlook hinges on successfully scaling its autonomy operations. “Our business proposition will be very compelling,” he said, “once we hit that next milestone.”
Written By Rodney Mbua
