Elon Musk, the CEO of Tesla, stated on Wednesday that the firm may experience a “few rough quarters” before a surge of income from self-driving software and services starts late next year if the US government reduces its assistance for manufacturers of electric vehicles. Following Musk’s response to queries regarding new US government policies under President Donald Trump during a quarterly results conference call, shares plummeted by over 5%.
Although its profit margin on car manufacturing was better than many had anticipated, Musk’s electric vehicle company reported the worst quarterly sales decline in over ten years and a profit that fell short of Wall Street targets.
It is now developing a new, less expensive vehicle, but according to Chief Financial Officer Vaibhav Taneja, manufacturing is expected to increase next quarter, albeit at a slower pace than anticipated. By the end of June, several early units had been produced. Citing the economy and the timing of the new car rollout, the company did not provide an update on its full-year deliveries forecast.
Considering the difficult path Tesla has taken lately, its disappointing results aren’t surprising,” eMarketer analyst Jacob Bourne stated. A fundamental model will hit the mark in terms of boosting sales if Tesla is able to get it right without detracting from its higher-priced models.
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