Elon Musk, the prominent figure behind Tesla, is facing challenges as the company recently reported a significant drop in quarterly profit, causing concern among investors. Despite Musk’s high profile, Tesla’s financial performance is underwhelming, with a 45% decrease in profits compared to the previous year. The operating margin also decreased from 9.6% to 6.3%.
Despite efforts to reduce costs, such as laying off over 10% of its workforce, Tesla is struggling with issues like weak consumer demand and a price war with competitors that is impacting its profitability. The company did experience a boost in revenue from selling regulatory credits, reaching $890 million in the quarter, three times more than in 2023.
Investors had high hopes for Tesla’s driverless taxi project, but Musk announced a delay in the event revealing its design from August to October. This setback comes as Tesla aims to capitalize on the potential of the robotaxi business, which Musk believes could increase the company’s market value to $5 trillion from the current $785 billion.
Meanwhile, Tesla faces competition in the autonomous vehicle sector, with Alphabet investing an additional $5 billion in its Waymo unit and General Motors resuming real-world testing for its Cruise automated taxi division.
