Tesla profit slumps as Musk pours money into AI, robots
TESLA on Wednesday reported a second consecutive quarterly decline in profit as the company poured resources into self-driving cars, humanoid robots and other new technologies.
Net profit fell to US$787 million in the third quarter from US$1.4 billion a year earlier, the company said. Sales were US$28 billion, little changed from a year earlier. Wall Street analysts had expected net profit of US$815 million and sales of US$28.3 billion, according to the average of estimates compiled by Tesla.
The company released its earnings report a day after its CEO, Elon Musk, said Tesla and SpaceX, another company Musk controls, were exploring a merger that would create a super-sized conglomerate that was deeply involved in cars, robots, rockets, satellite internet service and artificial intelligence.
The prospect of a merger comes at a critical moment for Tesla. Musk had warned profit would suffer at the automaker as it devoted resources to autonomous driving technology and humanoid robots that are being developed with AI. The company brings in very little revenue from those new lines of business.
Tesla this year began producing the Semi, an electric heavy-duty truck, and the Cybercab, a car that drives itself and does not have a steering wheel. But Tesla is only beginning to deliver the Semi in significant numbers and is not yet selling the Cybercab.
This month Tesla also unveiled the Roadster, a sports car. An edition of the vehicle will be capable of flying for short distances. But the Roadster will not go into production until 2028 and, with a price tag in the hundreds of thousands of dollars even for a version that cannot leave the ground, it is unlikely to sell in large numbers.
“In its current form, it’s a distraction — not a meaningful contribution to the Tesla product portfolio,” Paul Miller, principal analyst at Forrester, a research firm, said in a statement.
Tesla remains dependent on the Model Y sport utility vehicle and Model 3 sedan for much of its revenue.
— New York Times