Deals to let other auto makers charge EVs at Tesla’s supercharging network helped Tesla stock in the second quarter.

Tesla beat the Street by earning 91 cents a share in the second quarter. Shares of the electric vehicle maker barely budged initially in after-hours trading, but the stock later dropped after management talked with investors.

Tesla’s Full Self Driving software is the most likely culprit. Despite Tesla’s beat, things aren’t getting easier for the EV leader. New car prices and profit margins slid again.  

The decline was expected because selling electric cars has been a lot tougher in 2023 than it was in 2022.

And Tesla’s (ticker: TSLA) results highlight the problem the entire auto industry is having moving electric vehicles off the lot as the number of models proliferates and inventories rise along with interest rates.

“We’re in turbulent times,” said CEO Elon Musk on the company’s earnings conference call. As for the second quarter, Tesla reported operating income of $2.4 billion on sales of $24.9 billion. Wall Street was looking for operating profit of $2.7 billion, earnings of 80 cents a share, and sales of $24.2 billion.

Gross profit margins in the car business, excluding regulatory credit sales, came in at 18.1%, compared with 18.8% in the first quarter of 2023. Wall Street was looking for margins to fall between 18% and 19%. No surprise there.

First-quarter gross profit margins fell 11 percentage points year over year amid steep price cuts implemented by Tesla at the start of 2023.

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