Tesla Faces Another 'Earnings Shock'... Wall Street Says 'Worst Performance in 10 Years'

Sales Plunge Due to Musk's Political Activities

UBS Lowers Target Price... After-hours Down 4%

Global electric vehicle manufacturer Tesla recorded an 'earnings shock' that fell short of market expectations. There is analysis that CEO Elon Musk’s political actions have sparked opposition among European consumers, leading to boycott movements.

On the 23rd (local time), Tesla announced that its revenue for the second quarter (April to June) reached $22.496 billion. This marks a 12% decrease compared to the same period last year. Falling short of Wall Street’s average estimate ($22.74 billion) compiled by financial data provider LSEG, this is the second consecutive quarterly earnings shock.

During the same period, earnings per share (EPS) and operating profit dropped sharply by 23% and 42% respectively from a year ago, recording $0.40 and $923 million. Wall Street expressed disappointment with Tesla’s second-quarter results, calling it “the largest revenue decline in its 10-year history.” UBS stated that its “fundamentals are overestimated,” and suggested a target price of $215, about $100 lower than the recent stock price.

Previously, CEO Musk served as the head of the Department of Government Efficiency (DOGE) under the Donald Trump administration, causing discomfort among European consumers, who are strongly anti-Trump. His public support for the far-right German party 'AfD' also disappointed consumers with differing political views. According to the European Automobile Manufacturers Association (ACEA), Tesla registrations across Europe in May totaled 13,863, down 27.9% from May last year (19,227).

In May, CEO Musk left DOGE and returned to business management, but has yet to find a turning point for sales recovery. On the regular trading session that day, Tesla rose 0.14%, but after the second-quarter earnings announcement, it fell over 4% in after-hours trading, closing at $317.87.

Reporter: Eunhyuk Ryu ehryu@hankyung.com