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Image source: Visual China

Blue Whale News July 24 (Reporter Li Zhuoling)After experiencing global layoffs and other turmoil, Tesla delivered a less-than-ideal Q2 report card.

Tesla's second quarter financial report was released in the early morning of July 24th, Beijing time. The report shows that Tesla's total revenue in Q2 was US$25.5 billion, a year-on-year increase of 2%; the net profit attributable to Tesla's common shareholders (GAAP) was US$1.478 billion, a sharp drop of 45% from US$2.703 billion in the same period last year.

In the subsequent earnings call, Tesla CEO Musk also released a lot of information. He revealed that Tesla may obtain FSD (full self-driving) licenses in other markets, such as Europe and China, by the end of this year. But he also confirmed that the RoboTaxi, which was originally scheduled to be released in August this year, will be postponed to October 10.

As of the close of U.S. stocks on July 23, local time, Tesla's stock price fell 2.04% to $246.38. After the U.S. stock market closed, Tesla's stock price fell by 8%.

The automotive business is declining, but energy is a bright spot for growth

From the perspective of revenue segments, the automotive business is still the bulk of Tesla's revenue.

It is reported that Tesla's current revenue mainly comes from three businesses: automotive business, energy business, services and other businesses. Among the three businesses, only the automotive business showed a year-on-year decline in the quarter.

Image source: Screenshot of Tesla's financial report

Specifically, Tesla's revenue from the automotive business in the second quarter was $19.878 billion, down 7% year-on-year, but up from $17.378 billion in the previous quarter. The revenue of this segment was mainly affected by the decline in sales business.

The financial report shows that Tesla's revenue from automobile sales business in the quarter was US$18.53 billion, compared with US$20.419 billion in the same period last year; revenue from automobile regulatory credit was US$890 million, compared with US$282 million in the same period last year; revenue from car rental business was US$458 million, compared with US$567 million in the same period last year.

In terms of market performance, Tesla's total vehicle deliveries in the second quarter were 443,956, down 5% year-on-year, but up from 386,810 in the previous quarter. Among them, the delivery volume of Model S and Model X was 21,551, and the delivery volume of Model 3 and Model Y was 422,405, down 5% year-on-year.

Regarding the cheaper electric vehicle plan that the industry is concerned about, Tesla revealed in its financial report that new car plans, including more affordable models, will still begin production in the first half of 2025. "These vehicles will leverage some of the features of our next-generation platform and our existing platform and will be able to be produced on existing vehicle production lines."

Tesla wielded the "layoff knife" this quarter for cost-cutting purposes. In mid-April this year, Musk said in an internal email to employees that the company would lay off more than 10% of its global employees to cut costs and improve productivity. According to its estimate of the number of global employees at that time, this layoff may affect more than 14,000 employees.

It is worth mentioning that the energy storage business has become a highlight of Tesla's Q2 financial report. The financial report shows that Tesla's revenue from this business segment in the second quarter was US$3.014 billion, a year-on-year increase of 100% from US$1.509 billion in the same period last year.

Currently, the energy storage business is regarded by Morgan Stanley analysts as a "key trump card" in Tesla's hands. According to analysts' previous forecasts, Tesla Energy's revenue in fiscal 2024 will exceed US$7 billion, and by 2025, its profit margin will exceed Tesla's automotive business.

As for the services and other business segments, Tesla's revenue for the quarter was US$2.608 billion, a year-on-year increase of 21% from US$2.150 billion in the same period last year.

Robotaxi launch delayed, cost reduction remains the next focus

As the automotive business declines, investors are focusing on Tesla's other sectors, including autonomous driving, AI, humanoid robots, etc. in addition to energy storage.

In the earnings call, Musk confirmed that the RoboTaxi launch originally scheduled for August was postponed and will be released on October 10, and it is possible to be put into use by the end of this year or next year at the latest. Musk previously explained that the reason for the delay was the need to make design changes to the front of the robot taxi, adding that the extra time was needed "to allow us to show some other things."

Wedbush analyst Dan Ives believed in a previous report that the key to Tesla's valuation reaching more than $1 trillion next year and ultimately higher depends on how to monetize the AI/FSD narrative in the next few years.

It is reported that FSD will usher in new progress in China. Musk revealed in a conference call that Tesla will apply for regulatory approval in Europe and China to implement supervised FSD, and it is expected to be approved before the end of this year.

In fact, at the beginning of this year, Musk publicly stated on social media that Tesla will actively promote the implementation of FSD in China. At the end of April this year, Musk's visit to China also made the outside world imagine. In June this year, some media reported that the Shanghai Autonomous Driving Demonstration Zone had issued a road test license to Tesla, and FSD may be being tested. However, the news has not received official comment.

In the field of AI, Musk believes that the AI5 chip, which will be put into production at the end of next year, will make distributed computing power an obvious choice. Physically, future vehicles will be equipped with AI5 and above chips, and there may be billions of humanoid robots, which can provide amazing inference computing when vehicles and robots are idle.

In addition, when an analyst asked how artificial intelligence will affect automotive revenue, Musk said that the second-generation humanoid robot Optimus may contribute more to the company's revenue than all other business units of the company combined. In his view, global customer demand for humanoid robots will reach 22 million units, and Optimus will be in a leading position. "We have all the elements. I think we are the only company that has all the elements in terms of humanoid robots."

It is reported that Optimus has been sorting batteries in the factory. It is expected that thousands of Optimus will be performing tasks in Tesla factories by the end of 2025 and will begin to be delivered to external customers in 2026.

Looking ahead, Tesla's focus will continue to be on cost reduction, including lowering the sales cost per vehicle, developing existing hardware business, and accelerating the development of artificial intelligence products and services.

"While the deployment time of driverless taxis depends on technological progress and regulatory approval, we are working hard to make it a reality given its huge potential value," Tesla said. "At the same time, we are managing our product portfolio in a long-term direction, focusing on sales growth, accelerating the installation and deployment of energy products, and generating sufficient cash flow to invest in future growth."