Tesla shares dropped significantly following the release of a lower-than-expected earnings report, which included a loss for the quarter of $408 million, along with the departure of the company’s co-founder and Chief Technology Officer J.B. Straubel.
CNBC reports that Tesla’s Q2 earnings release resulted in a significant drop in Tesla stock price with an overall decline of 10 percent in extended trading. The drop continued into Thursday trading, Tesla is down 14 percent at the time of this writing. Refinitiv compiled a summary of what Tesla posted versus what analysts expected, it reads as follows:
- Loss per share on an adjusted basis: $1.12 vs. 40 cents expected
- Revenue: $6.35 billion versus $6.41 billion expected
Despite falling short of expectations, Tesla reaffirmed full-year delivery guidance stating that the company still believes it will sell 360,000 to 400,000 vehicles in 2019 mostly consisting of Model 3 sedans. In the first six months of 2019, Tesla delivered approximately 158,200 vehicles to customers and still has to deliver more than 200,000 in the last six months of the year to hit the low-end of its projected figures.
Tesla alleges it has a weekly run-rate of 7000 Model 3 cars and plans to produce 10,000 Model 2s per week by the end of 2019. Tesla stated in its second-quarter letter that it plans to improve production at existing factories in order to make high-volume Model 3 sales possible. While sale of the firm’s Powerwall and Powerpack energy storage products increased, sale of its solar energy products continued their decline. Tesla combines sales of all energy generation and storage product into one figure which came to $368.2 million in revenue, a two percent decline over the same time period last year.
What didn’t help the poor earnings report is the announcement of the departure of Tesla co-founder and Chief Technology Officer J.B. Straubel. Drew Baglino, vice president of technology, will be replacing Straubel as CTO while Straubel will stay on in an advisory role.
The announcement was made on a conference call with analysts on Wednesday, Tesla CEO Elon Musk discussed his departure stating: “I want to thank JB for his fundamental role in creating and building Tesla. If we hadn’t had lunch in 2003, Tesla wouldn’t exist, basically.” Straubel stated that his time at Tesla had been an adventurous 16 years and added: “I’m not disappearing, and I just wanted to make sure that people understand that this was not some, you know, lack of confidence in the company or the team or anything like that.”
Straubel is the latest in a long line of executive departures at Tesla, recently the firm’s vice president in charge of engineering for car interiors and exteriors, Steve McManus, left the firm to join Apple. Tesla executive, Michael Schwekutsch, and chief engineer Doug Field also recently departed the firm to join Apple.