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Tesla (NASDAQ: TSLA) has now disclosed its earnings for the second quarter of 2024, managing to post mixed results vis-a-vis the top-line and bottom-line metrics.
Tesla (TSLA) Q2 2024 Earnings
Tesla has reported $25.5 billion in revenue for the second quarter of 2024, beating consensus expectations of $24.74 billion (Bloomberg's compilation of estimates).
Revenue In Billions Of Dollars
Tesla's energy business is finally coming of age, as indicated by the fact that the EV giant deployed 9.4GWh of energy storage products in the second quarter, constituting the highest quarterly deployment yet. The following chart gives a segmental overview of Tesla's top-line metric. Do note that the segmental consensus revenue estimates are based on The Zacks' compilation found here.
Tesla's Segmental Revenue In Billions Of Dollars
The following snippet summarizes the EV giant’s production activities during the quarter:
As we reported earlier this month, Tesla delivered 443,956 units in Q2 2024 against a production level of 410,831 units. For the benefit of those who might not be aware, Tesla had delivered 386,810 units in the first quarter of the year against a production level of 433,371 units.
Moreover, Tesla's auto gross margin (ex-Regulatory Credits) printed at 14.65 percent for the just-concluded quarter.
Tesla's Auto Gross Margin (ex-Regulatory Credits) In Percents
Do note that Tesla reduced the price of Model Y, Model X, and Model S in the US by $2,000 each in April, and lowered the interest rate on Model Y purchases to just 0.99 percent in May, constituting the lowest financing rate in its history. These measures are expected to have further dented the EV giant's already depressed gross margin. In fact, analysts now expect Tesla's gross margin to recover only in 2025 when the Cybertruck's production picks up pace.
The EV giant has reported a free cash flow of $1.3 billion for the second quarter of 2024, driven by a decrease in inventory. The company also spent around $600 million in AI-related CapEx.
Finally, Tesla has announced $0.52 in non-GAAP (adjusted) EPS, missing consensus expectations of $0.61.
Most $TSLA analysts will back out the $350M restructuring charge ($.08-$.10/share hit to 2Q Adj EPS) as one-time, as long as $TSLA clearly communicates that it is a one-time severance charge. This is how it was presented in the 1Q 10-Q. pic.twitter.com/NuO77yo8pb
— Gary Black (@garyblack00) July 23, 2024
Bear in mind that there is a fair bit of uncertainty around Tesla's EPS this quarter, arising from how the EV giant deals with its restructuring costs that were incurred in Q1 but only recognized in Q2.
The following snippet summarizes Tesla’s latest guidance:
At the time of publication, the EV giant's stock is down around 5 percent in after-hours trading. Investors appear to be particularly concerned with Tesla's tanking auto gross margin (ex-RC) metric.
Earnings Call
Elon Musk has announced that the Tesla robotaxi reveal event is now scheduled for the 10th of October.
The version 1 of the Optimus humanoid robot is now expected to enter production as soon as early 2025.
Elon Musk: "We are on track to deliver a more affordable model by the first half of next year."
Tesla Roadster is expected to enter production in 2025.
Elon Musk has said that Tesla is not abandoning its Dojo supercomputer and that there remains a path for it to attain parity with NVIDIA's offerings.
Elon Musk: "We are doing some advertising."
Important Catalysts
Robotaxi
As we reported recently, Tesla has delayed its robotaxi reveal event from August to October to give its engineers the time to build more prototypes. Do note that Tesla's robotaxi is expected to share the same platform that the EV giant intends to leverage for rolling out its cheaper sub-$30,000 Model 2.
Subsidies
Take away the subsidies. It will only help Tesla.
Also, remove subsidies from all industries!
— Elon Musk (@elonmusk) July 16, 2024
Should former President Trump win another stint at the White House come November, EV-related subsidies and tax credits are expected to end.
Last year, Tesla reduced the price of its Model X in the US by a whopping $40,000 just to make it eligible for the $7,500 federal EV tax credits. Cumulatively, the EV giant received around $1.8 billion in tax credits in 2023.
Clearly, the removal of these subsidies will hurt Tesla. On the flip side, this step will hurt Tesla's competitors far more acutely. This explains Elon Musk's recent placidity with the removal of these government incentives.
About the author: Writing is my one incontrovertible passion. Over the past six years, he has authored over 2,200 distinct articles on financial and tech-related topics, spanning nearly 1 million words. And he has been a member of Wcctech mobile team since 2025. As an alumnus of the University of Toronto, Rotman Commerce Program, I bring nuance, in-depth knowledge, and a unique perspective to every topic that I cover. When I'm not writing, I'm traveling the world, exploring hidden confectionaries and restaurants as an aspiring food connoisseur.
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