Earnings at Musk’s car company Tesla fall
Tesla’s profits fell last quarter as the car company run by Elon Musk poured more money into research and development and cut profits from a sharp increase in vehicle sales.
The Austin, Texas-based company reported second-quarter net income of US$1.11 billion ($1.59 billion), or 32 cents per share. This compares with earnings of US$1.17 billion ($1.67 billion), or 33 cents per share, in the same quarter last year.
Excluding certain expenses, earnings fell to 33 cents per share, down from 40 cents per share in the prior-year quarter. That fell short of Wall Street analysts’ forecast of 53 cents per share, according to FactSet.
Revenue rose 26% to $28.24 billion ($40.41 billion), beating analysts’ forecasts of $26.42 billion ($37.80 billion).
Spending on research and development rose nearly 49 percent from the previous year to US$2.37 billion ($3.39 billion); This is higher than at least four quarters ago.
Tesla shares fell 2.7 per cent to US$363.98 ($A520.79) in after-hours trading shortly after announcing its latest results. The stock finished the regular trading session down 1.3 percent and is down just under 17 percent in 2026.
In early July, Tesla reported that it delivered 480,216 cars in the second quarter, a 25 percent increase over the same period last year and the second consecutive quarter of earnings. Sales also exceeded analysts’ expectations, according to a FactSet survey.
Tesla’s rising sales in 2026 mark a major turnaround from a year ago, when many Europeans refused to buy the company’s cars because Musk embraced far-right political candidates in elections there.
The majority of the company’s vehicle deliveries last quarter were the Model Y crossover SUV and Model 3 sedan. Tesla introduced cheaper versions of both models last year in hopes of boosting sales. It also reduced leasing and credit costs in Europe.
The increase in electric vehicle purchases in general in Europe due to the increase in gasoline and diesel prices due to the Iran war also helped sales.
Just a few months ago, Tesla reported that sales would fall for a second consecutive year in 2025, forcing it to cede the crown of the world’s largest EV maker to China’s BYD.
Tesla’s EV sales accounted for most of the company’s overall revenue, but the company got a boost from its power generation and battery storage business, which generated $US3.14 billion ($4.49 billion) in revenue, up 13 percent from last year’s second quarter.
The company has also benefited from increased subscriptions for its driver-assistance feature called Fully Self-Driving (Supervised), which is available in the US.
