Tesla Profits Plunge Amid Increased Competition and Slow Market

Tesla's profit for the second quarter plummeted over 40% from the previous year, reflecting the electric vehicle maker's struggle against intensifying competition and slowing EV sales growth. 

This decline marks unfamiliar territory for a company that had risen to be the world's most valuable automaker due to robust sales and profitability. The increasing competition from domestic and international automakers and a maturing EV market have impacted that.

Tesla's shares dropped approximately 8% in premarket trading on Wednesday, contributing to a broader market downturn. Year-to-date, Tesla's stock has decreased about 1%, falling as much as 44% earlier this year. 

The company reported an adjusted quarterly income of $1.8 billion, translating to 52 cents per share. This fell short of analysts' expectations of 61 cents per share,significantly lower than the 91 cents per share earned a year earlier. The profit margin suffered due to a series of price cuts on EVs.

Tesla CEO Elon Musk once dismissed the quality of EVs from other automakers as only a short-term issue for Tesla. However, this statement has proven untrue, with competitors like BYD making inroads into Tesla’s market share. 

Musk reiterated Tesla's commitment to a fully electric transportation future, including for cars, planes, and ships, announcing that detailed plans for fully-automated robotaxis would be delayed to October. Despite regulatory and technical challenges, Musk remains optimistic about achieving driverless robotaxis by next year, though past predictions have been overly optimistic.