Tesla plunges 10% after reporting a worse-than-expected loss, co-founder steps down

Tesla plunges 10% after reporting a worse-than-expected loss, co-founder steps down

Tesla Inc. (NASDAQ:TSLA) reported a worse-than-expected loss in Q2 earnings yesterday. The company’s shares plunged as much as 12% in after-hours trading and declined 22% this year as of markets close Wednesday. Revenue was $6.35 billion versus $6.41 billion expected.

J.B. Straubel

J.B. Straubel Source: Wikipedia

Another major management change has also been announced – Tesla’s co-founder J.B. Straubel, who’s been with the company since before the billionaire CEO Elon Musk joined the board 15 years ago, is leaving the chief technology officer job and becoming an adviser.

I love the team and I love the company and I always will,” Straubel commented. “Drew and I have worked closely together for many years and I have total confidence in Drew. I am not going anywhere.

Despite delivering a record number of vehicles in the second quarter, Tesla lost $1.12 a share. Elon Musk is sure that the company will earn a profit in the thee months ending in September, however, he told shareholders he’ll prioritize other goals as well.

Demand was driven by the lower-margin Model 3, which ramped up in the US and started sales in China and Europe.

Record second-quarter deliveries resulting in a larger-than-expected loss is a clear example that the company will be challenged to recreate the successful US sales model in foreign markets where incumbent, established and well-funded automakers enjoy home-team favor,” said Kevin Tynan, an analyst with Bloomberg Intelligence.

Tesla’s automotive gross margin dropped to 18.9% in the second quarter, from 20.6% in the year-earlier period. The decline was driven by the lower average selling price of the company’s vehicles, as deliveries of the Model 3 more than quadrupled the combined total for the costlier Model S and X.

The all-new Model Y crossover is expected to launch by the fall of 2020 and the company sees it being more profitable than the Model 3, which is selling for about $50,000.

Read Also: