Tesla shares fell more than 8% in premarket trading in the U.S. after the electric carmaker reported second-quarter earnings that missed expectations amid ongoing pressure in its auto business.
Elon Musk’s electric vehicle firm reported that automotive revenue dropped 7% year-on-year in the June quarter to $19.9 billion while its adjusted earnings margin also declined.
The company has been forced to slash prices globally and offer discounts and incentives amid slowing sales and rising competition, especially in China — one of its key markets.
Tesla shares are nearly 1% lower this year to date, while the S&P 500 has risen more than 16%.
Tesla remains the top seller of electric vehicles in the U.S. by far, but is losing market share to a growing number of rivals due in part to its aging line-up of sedans and SUVs and the impact of Musk’s incendiary and political commentary.
Bulls and bears have been in a grapple over the stock, with some believing its core car business is under pressure, while others remain hopeful about a future Musk has promised around autonomous driving, AI and robotaxis.