{"id":20191,"date":"2025-07-24T09:34:09","date_gmt":"2025-07-24T09:34:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/20191\/"},"modified":"2025-07-24T09:34:09","modified_gmt":"2025-07-24T09:34:09","slug":"tesla-likely-to-face-a-few-rough-quarters-from-end-of-u-s-ev-support-musk-says","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/20191\/","title":{"rendered":"Tesla likely to face \u2018a few rough quarters\u2019 from end of U.S. EV support, Musk says"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

Tesla’s revenue fell to US$22.5-billion for the April to June quarter from US$25.5-billion a year earlier.Mike Blake\/Reuters<\/p>\n

Tesla Inc. TSLA-Q<\/a> chief executive Elon Musk said on Wednesday that U.S. government cuts in support for electric vehicle makers could lead to a \u201cfew rough quarters\u201d for the company before a wave of revenue from self-driving software and services begins late next year. Shares fell nearly 5 per cent after Musk<\/a> responded on a quarterly results conference call to questions about new U.S. government policies under President Donald Trump<\/a>.<\/p>\n

Musk\u2019s electric-vehicle maker posted the worst quarterly sales decline in more than a decade and profit that missed Wall Street targets, but its profit margin on making cars was better than many feared. Musk is pursuing autonomous driving to power privately owned vehicles as well as robotaxis that it plans to put into production next year.<\/p>\n

In the meantime, it is working on a new, cheaper car, though chief financial officer Vaibhav Taneja said that production would ramp up next quarter, slower than initially expected. It produced some initial units by the end of June. The company did not provide an update on its full-year deliveries forecast, citing the economy and timing of the new car rollout.<\/p>\n

\u201cTesla\u2019s disappointing results aren\u2019t surprising given the rocky road it\u2019s travelled recently,\u201d said eMarketer analyst Jacob Bourne. \u201cA truly affordable model will hit the bullseye in terms of boosting sales if Tesla can effectively position it right without detracting from its higher-priced models.\u201d<\/p>\n

A key driver of Tesla\u2019s profit is disappearing fast<\/a><\/p>\n

The second straight quarterly revenue drop, with a 12-per-cent fall, comes despite the launch of a refreshed version of its best-selling Model Y SUV that investors had hoped would help revive demand. A 51-per-cent dive in sales of automotive regulatory credits, which other automakers who have difficulty complying with government emissions rules buy from Tesla, also hurt revenue and profit. Revenue fell to US$22.5-billion for the April-June quarter from US$25.50-billion a year earlier, slightly behind analyst targets compiled by LSEG. Adjusted profit per share of 40 cents lagged the Wall Street consensus.<\/p>\n

The automotive gross margin, which excludes regulatory credits, was 14.96%, above Wall Street estimates, helped in part by lower cost per vehicle. Pricing and margins are important as Tesla wrestles with demand and faces falling government support. Tesla global deliveries dropped 13.5 per cent in the second quarter, and the U.S. government later this year is cutting US$7,500 tax credits for EV buyers. \u201cWe probably could have a few rough quarters,\u201d Musk said, when asked about the credits. \u201cI\u2019m not saying we will, but we could \u2013 you know, Q4, Q1, maybe Q2, but once you get to autonomy at scale in the second half of next year, certainly by the end of next year, I think I\u2019d be surprised if Tesla\u2019s economics are not very compelling.\u201d<\/p>\n

Tesla had said in April it would start producing the more affordable model by the end of the first half and sources had told Reuters the vehicle, a stripped-down version of its Model Y SUV, would be delayed by at least months. <\/p>\n

Tesla on Wednesday did not disclose any details of the model, how many units it had made, or how it would be priced. Musk responded to a question of what the vehicle would look like by saying, \u201cIt\u2019s just a Model Y,\u201d joking that he \u201clet the cat out of the bag there.\u201d Tesla\u2019s lineup is relatively old, despite a recent refresh of the flagship Model Y, and it faces rising competition from cheaper EVs, especially in China<\/a>, and a persistent backlash against Musk\u2019s far-right political views.<\/p>\n

Tesla sales drop in Europe for fifth month in a row despite Musk\u2019s \u2018major rebound\u2019 promise<\/a><\/p>\n

The company also said it continued to expect volume production of its custom-built robotaxi \u2013 called the Cybercab \u2013 and Semi Truck in 2026. Much of the company\u2019s trillion-dollar valuation hangs on its bet on its robotaxi service \u2013 a small trial of which was started in Austin, Texas, last month with about a dozen Model Y SUVs \u2013 and on its development of humanoid robots. \u201cAutonomy is the story,\u201d Musk said on the conference call, describing plans to roll out autonomous ride hailing to about half of the U.S. population by the end of this year. <\/p>\n

Tesla is looking for robotaxi regulatory approval in the San Francisco Bay Area, Nevada, Arizona, Florida and other places, he said, and the company is close to getting regulatory approval for supervised Full Self-Driving driver assistance software in the Netherlands. The robotaxi business was likely to have a material impact on financials around the end of next year, Musk said.<\/p>\n

Investors are concerned about whether Musk will be able to devote enough time and attention to Tesla after he locked horns with Trump by forming a new political party this month. He had promised weeks earlier that he would cut back on government work and focus on his companies.<\/p>\n

A series of high-profile executive exits, including a longtime Musk confidant who oversaw sales and manufacturing in North America and Europe, is also adding to the concerns.<\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: Tesla’s revenue fell to US$22.5-billion for the April to June quarter from US$25.5-billion…\n","protected":false},"author":2,"featured_media":20192,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[901,888,902,879,877,903,45,49,48,876,895,896,891,878,875,46,549,295,894,887,914,880,881,893,889,890,884,904,885,909,910,912,907,911,905,908,882,898,899,714,897,906,865,61,900,892,886,883,913],"class_list":["post-20191","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-alberta","tag-arts-news","tag-bc","tag-breaking-news","tag-breaking-news-video","tag-british-columbia","tag-business","tag-ca","tag-canada","tag-canada-news","tag-canada-sports","tag-canada-sports-news","tag-canada-trafficcanada-weather","tag-canadian-breaking-news","tag-canadian-news","tag-economy","tag-education","tag-environment","tag-federal-government","tag-foreign-news","tag-globe-and-mail","tag-globe-and-mail-breaking-news","tag-globe-and-mail-canada-news","tag-government","tag-life-news","tag-lifestyle","tag-local-news","tag-manitoba","tag-national-news","tag-new-brunswick","tag-newfoundland-and-labrador","tag-northwest-territories","tag-nova-scotia","tag-nunavut","tag-ontario","tag-pei","tag-photos","tag-political-news","tag-political-opinion","tag-politics","tag-politics-news","tag-quebec","tag-sports-news","tag-technology","tag-travel","tag-trudeau","tag-us-news","tag-world-news","tag-yukon"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/20191","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=20191"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/20191\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/20192"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=20191"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=20191"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=20191"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}