Tesla reports hefty profit drop due to price cuts, lower vehicle sales

NEW YORK: Tesla reported a hefty drop in second-quarter profits Tuesday due to the effect of price cuts while spending aggressively on autonomous driving and other technology.

Elon Musk’s electric vehicle company reported profits of $1.5 billion, down 45 percent, on revenues of $25.5 billion, which were up two percent behind an increase in its energy generation and storage business.

Tesla’s earnings per share missed analyst expectations, while revenues exceeded them.

The results are the latest in a rough patch for Musk’s EV titan as it contends with rising competitive pressures that prompted a string of price cuts across leading markets.

Tesla laid off 10 percent of its global staff this year — about 14,000 workers — as part of a push to cull expenses to finance major new investments.

That reorganization also resulted in one-time expenses of $622 million in the second quarter due to severance and other costs, said Chief Financial Officer Vaibhav Taneja.