Tesla Profit Margins Shrink in 2024

Tesla reported this week that second-quarter 2024 earnings were down more than 40 percent year-on-year to $1.48 billion, compared with $2.70 billion in Q2 2023. The electric vehicle manufacturer has cut prices to cope with increased competition from other manufacturers and slowing demand while increasing spending on artificial intelligence projects (on-board computers, sensors), all of which caused its profit margin to shrink considerably.

As the following infographic shows, after peaking at almost 30 percent two years ago, Tesla's profit margin fell below 20 percent at the beginning of last year, then below 15 percent in the second quarter of 2024 (14.6 percent). This is the lowest profit margin recorded by the company in over five years.