Tesla's profit margin is getting hammered by EV discounts and hefty AI spending

Tesla Q2 Earnings: Adjusted Operating Margin Shrinks to Lowest in Three Years #

Electric vehicle manufacturer Tesla reported its Q2 earnings on Tuesday, missing Wall Street estimates and sending its stock down by 8% in extended trading. The company’s adjusted operating margin dropped to its lowest level in three years, marking the fourth consecutive quarter of shrinkage. Despite efforts to boost sales with incentives and discounts, Tesla’s auto sales have been declining. The company’s expenses are rising as it invests in artificial intelligence infrastructure for self-driving cars and humanoid robots. Automotive revenue fell 7% due to increased competition, particularly in China. Tesla is extending zero-interest loan offers and slashing prices to encourage sales.