Tesla’s Stock Falls 6% As Auto Sales Continue To Decline

Tesla’s (TSLA) stock is down 6% in premarket trading after the electric vehicle maker reported a second consecutive quarter of declining automotive sales and weak financial results.

The Austin, Texas-based company announced earnings per share (EPS) of $0.40 U.S., which was below the $0.43 U.S. expected on Wall Street.

Revenue in the period totaled $22.50 billion U.S., which fell short of the $22.74 billion U.S. that had been the consensus expectation of analysts who track Tesla’s progress.

Automotive sales fell 16% year-over-year to $16.7 billion U.S. during Q2 of this year. Of that amount, revenue from automotive regulatory credits fell to $439 million U.S. from $890 million U.S. a year earlier.

On an earnings call with analysts and media, CEO Elon Musk said Tesla “probably could have a few rough quarters” ahead due to the expiration of U.S. government electric vehicle tax credits.

Tesla is struggling with rising competition in key markets such as China and Europe, especially from lower cost Chinese electric vehicles.

The company has also faced a consumer backlash in Europe and North America over the politics of Musk and his involvement with the administration of U.S. President Donald Trump.

Recent data from the European Automobile Manufacturers Association show that Tesla’s new car registrations declined in Europe again in June.

Earlier in July, Tesla reported a 14% year-over-year decline in its vehicle deliveries to 384,000 units for the second quarter.

More difficulties could be ahead for Tesla as U.S. President Donald Trump’s recently approved tax and spending bill ends a $7,500 U.S. electric vehicle tax credit at the end of September.

Musk continues to try and shift Tesla’s focus away from its struggling electric vehicles and towards new self-driving robotaxis and humanoid robots.

Tesla’s services and other segment, which includes revenue from its electric vehicle charging stations, saw its gross profit rise 17% year-over-year in Q2.

Tesla’s cryptocurrency holdings, mostly Bitcoin (BTC), are now worth $1.24 billion U.S., up from $722 million U.S. a year ago.

Before today (July 24), TSLA stock had declined 12% on the year to trade at $332.56 U.S. a share.