Tesla Inc (NASDAQ:TSLA) stock plunges 11.39% (As on July 24, 11:21:44 AM UTC-4, Source: Google Finance) after the company’s profits slumped 45 per cent in the second quarter as the world’s largest electric vehicle maker faced slower sales, soaring costs from employee lay-offs and ever-greater investments in its artificial intelligence infrastructure. Elon Musk, Tesla’s chief executive, also used the company’s quarterly earnings announcement to officially postpone the planned unveiling of Tesla’s first “robotaxis” — a fleet of self-driving taxis. The bottom line was pressured by a fall automotive sales to $18.53B from $20.42B a year earlier and weaker-than-expected margins amid pressure from EV price cuts, restructuring charges and costs related to investment into AI projects. Gross margins excluding credits, a closely watched metric, fell to 14.7% in Q2 from 18.1% a year earlier, missing analysts’ estimates for 16.3%.  In April, it announced plans to cut 10 per cent of its workforce, about 14,000 people, incurring large restructuring and legal costs. Tesla delivered 443,956 EVs during the quarter, down 5% from the same period a year earlier. The company’s energy storage business was a bright spot in the quarter, deploying 9.4 gigawatts in Q2, up 158% from a year earlier. The operating income decreased YoY to $1.6B in Q2, resulting in a 6.3% operating margin.

TSLA in the second quarter of FY 24 has reported the adjusted earnings per share of 52 cents, missing the analysts’ estimates for the adjusted earnings per share of 61 cents. The company had reported the adjusted revenue growth of 2 percent to $25.5 billion in the second quarter of FY 24, beating the analysts’ estimates for revenue of $24.33 billion. Quarter-end cash, cash equivalents and investments in Q2 was $30.7B. The sequential increase of $3.9B was a result of positive free cash flow of $1.3B, driven by an inventory decrease of $1.8B and partially offset by AI infrastructure capex of $0.6B in Q2.

Looking ahead, Tesla reiterated that vehicle volume growth rate may be notably lower than the growth rate achieved in 2023, as the company works on the launch of next generation vehicle and other products. Musk has also increased Tesla’s focus on developing Optimus, an autonomous humanoid robot. He said Optimus robots were already performing tasks in Tesla factories and that it would begin limited production next year. Musk added that Tesla expected to produce the robots for consumer use in 2026.