Tesla's stock fell about 13.5% on Thursday, marking one of its worst single-day losses in years. The electric vehicle maker has lost roughly a quarter of its market value this year as investors grow wary of weak profits and heavy spending on artificial intelligence and robotics.
The sell-off came a day after Tesla reported second-quarter earnings that missed profit expectations. The company posted earnings of 31 cents per share, well below the 51 cents per share analysts had predicted, although revenue slightly exceeded forecasts.
During the earnings call, chief executive Elon Musk faced questions about the slow progress of two flagship projects: the Robotaxi self-driving service and the Optimus humanoid robot. Musk insisted that safety concerns were delaying the Robotaxi rollout, and acknowledged numerous hurdles in developing Optimus, which he again claimed would become Tesla's biggest product ever.
Tesla's pivot to robotics and autonomous vehicles has required immense capital outlays with little immediate return. The company spent $5.8bn in the second quarter, resulting in negative free cash flow of $1.1bn, the first time that has happened in more than two years. Although electric vehicle sales surged thanks to European demand and rising fuel costs, the heavy investment has shifted investor focus away from core auto revenue.
Tesla's decline made it the worst performer among the so-called 'Magnificent Seven' megacap tech stocks, which also include Alphabet, Amazon, Meta, Nvidia, Apple and Microsoft. The group collectively lost $767bn in market value on Thursday, with Alphabet shares falling 6.5% after reporting higher spending plans and its first ever cash burn.
