Tesla Reports 45% Drop in Profits as AI Costs Rise, Vehicle Prices Fall [Video]

Tesla (TSLA) reported second-quarter profits dropped 45% from a year ago, as costs for development of artificial intelligence (AI) projects rose, while the average sale price of its vehicles fell. 

The drop in profits came despite a 2% bump in revenue from last year to $25.5 billion, above the $24.98 billion analysts had expected, according to estimates compiled by Visible Alpha.

Lower average sale price and lower delivery numbers than the company reported in the second quarter of 2023 impacted the EV giant’s profitability, with a reported $1.48 billion in profit, down from $2.7 billion last year and below estimates.

Tesla said it has a number of key areas of focus on going forward, including reducing the average cost per vehicle, along with developing projects in the AI space like its robotaxi and humanoid robots, which CEO Elon Musk recently saidwill be in “low production” and working in Tesla factories by next …