Tesla reported second-quarter earnings on Wednesday that missed Wall Street's profit expectations. Following the report, shares in Elon Musk's company fell another 3% in after-hours trading, adding to a decline of approximately 14% so far this year.
Despite reporting its best delivery quarter on record and a sharp increase in vehicle sales, the electric automaker saw its profits fall. This decline was attributed to price cuts and higher expenses as the company increased spending on research and development.
For the first time in more than two years, Tesla reported negative free cash flow, with expectations of a burn of roughly $3.25 billion. This spending surge is driven by the company's acceleration of infrastructure for its ambitions in AI, robotics, and autonomy, intensifying investor scrutiny over when these investments will pay off.
The automaker has taken a back seat to Musk's rocket and AI company, SpaceX, which held the largest stock market debut in history last month. While that event briefly made Musk the world's first trillionaire, his net worth has since fallen from its peak.