Tesla’s sales and profits drop as Musk’s political moves continue to impact brand

TL/DR –

Tesla has reported a 12% drop in revenue and a 16% slump in profits in the quarter ending June, which is attributed to Elon Musk’s foray into politics and subsequent boycotts of the company. Musk has been focusing less on car sales and more on robotaxis, automated driving software and robotics for the future of Tesla, but these businesses are yet to become successful. The recent withdrawal of a federal budget credit worth $7,500 for electric car buyers and the abolition of penalties for car makers exceeding carbon emission standards, both of which significantly threaten Tesla’s business model, have also affected the company’s financial performance.

Elon Musk’s Political Ventures Impact Tesla’s Profits and Sales

Tesla, under Elon Musk, continues to face financial challenges as profits and sales fell drastically in the last quarter, as a result of Musk’s political involvement. The quarter witnessed a drop of 12% in revenue and a slump of 16% in profit.

Dipanjan Chatterjee, a Forrester analyst, suggested that the Tesla brand has been tainted due to the public perception of its CEO, Elon Musk. The company’s earnings fell to $1.17bn, with revenue decreasing to $22.5bn, slightly surpassing Wall Street’s predictions.

Investors are keenly awaiting Musk’s comments in the company’s earnings call, as Tesla shares remained steady in after-hours trading. Musk’s political stance and support for controversial figures have reportedly led to hesitation among prospective buyers in not just the US, but also Europe.

Tesla Struggles Against Rivals Amidst New Strategies

While Tesla is shifting its focus more towards advanced technologies such as robotaxis and automated driving software, their competitors, including China’s BYD and Germany’s Volkswagen, are taking advantage of this situation. Despite Tesla’s attempts to launch its robotaxi service in Austin, Texas, it still faces stiff competition from current leader, Waymo.

Adding to the company’s struggles, the new federal budget has eliminated an electric car credit amounting to $7,500 and penalties for exceeding carbon emission standards. This jeopardizes Tesla’s business of selling “carbon credits” to conventional car firms. As a result, Tesla’s revenue from credit sales has sharply decreased from $890 million to $439 million within a year.

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