Tesla stock tumbles over 11% on shrinking auto sales

Tesla Inc. stock tumbled more than 11 per cent on Wednesday as its shrinking auto sales disappointed investors.

At 11:32 am EDT, Tesla stock price was at $218.71, down $27.67, or 11.23 per cent.

On Tuesday, Tesla stockclosed at $246.38.

Tesla on Tuesday reported disappointing earnings for the second quarter.

Its June quarter net income fell 45 per cent to $1.48 billion as compared to $2.7 billion a year ago as the electric vehicle sales tumbled for the second quarter in a row.

While the profit fell for a third straight quarter, its revenue was better than expected, rising 2 per cent to $25.5 billion.

Tesla said it posted record quarterly revenue “despite a difficult operating environment.”

Earlier in July, Tesla had said that it sold 443,956 vehicles in April-June period, down 4.8 per cent from 466,140 in the same period a year ago.

The electric vehicle maker’s gross profit margin, the percentage of revenue it gets to keep after expenses, fell to 18 per cent.

The carmaker postponed a highly anticipated launch of autonomous taxis.

Tesla chief executive officer Elon Musk said the company will push back an event showcasing robotaxi prototypes by about two months, to October.

“The value of Tesla overwhelmingly is autonomy. These other things are in the noise relative to autonomy,” Musk said.

Tesla will manufacture new, lower-cost cars at its plant in Austin starting in the first half of next year, said Musk.

The company will also make both the robotaxi and the Optimus robot in Texas.

Among the other disappointing announcements, Tesla said more affordable models won’t go into production until the first half of next year, a planned factory in Mexico is on hold until after the US presidential election in November, and a humanoid robot won’t start selling until sometime in 2026.