Tesla stocks plummeted more than 11 percent on Wednesday, July 24th. This comes after the electric vehicle (EV) manufacturer reported that this year’s vehicle volume growth would be “notably lower” than in 2023.
This might seem like an alarming sign for investors. However, Tesla also reported that there had been a slight increase in their Q2 revenues.
Tesla’s revenue for Q2 increased by 2 percent to $25.5 billion. The three main factors behind this increase in revenue were Cybertruck sales, higher regulatory credit, and profits from their energy generation and storage business.
The company also reported that its total operating cash flow is $3.6 billion, and its free cash flow is $1.3 billion.
Tesla will produce cheaper vehicles by 2025
Despite its lackluster performance in the stock market, Tesla did send a calming message to investors. The company stated in its report that it will meet the production demands for new vehicles. This new production will include more affordable models. The report also stated that production remains on track for the start of production in the first half of 2025.
Tesla’s report elaborated on this production saying, “These vehicles will utilize aspects of the next-generation platform as well as aspects of our current platforms and will be able to be produced on the same manufacturing lines as our current vehicle line-up.”
Additionally, the report explained that this production strategy will “result in achieving less cost reduction than previously expected.” According to Tesla, this will enable the company to “prudently” grow vehicle production.
Cybertruck production shows promise for Tesla despite poor stock performance
Despite the underwhelming performance of Tesla in Q2, the company’s Cybertruck production has been described by industry analysts as “very promising.”
During Q2, Teslas’s Cybertruck production tripled in comparison to Q1. In its Q2 report, the company also stated that Cybertruck is expected to be a profitable product by the end of the year.
Another promising sign from Tesla is that the company has exceeded expectations as an energy business. Tesla’s revenue as an energy generation and storage business doubled in comparison to Q1 2024.
Tesla’s vehicle delivery improved in comparison to Q1 2024
Bloomberg had previously estimated that Tesla would deliver 439,302 vehicles worldwide in Q2 2024. The EV manufacturer exceeded this estimate, delivering 443,956 vehicles worldwide during Q2 2024.
Even though the delivery number remains five percent below deliveries made in Q2 2023, Tesla nonetheless managed to improve its Q1 delivery numbers. During the first quarter of the year, Tesla only delivered 386,810 cars.
Nonetheless, Tesla was not the only tech giant that struggled during Q2 2024. It is also reported that Alphabet’s stock fell after it released earnings for Q2.
Alphabet’s stock fell by 4.3 percent, and analysts suggest that YouTube is largely to blame for this lackluster Q2 performance. Commentators suggest that the website’s inability to generate the amount of ad revenue that was expected from it caused shares to fall.
