Combustion-engine vehicles fueled profits for GM and Ford in Q2 even as financial reports reflected ongoing challenges in the EV market.
First, let’s dig into Tesla’s latest earnings. The EV maker’s net income fell 45% YoY to $1.5 billion while total revenue grew 2% to $25.5 billion. It marked Tesla’s second straight quarter of falling profits, per the Wall Street Journal.
“There have been quite a few competing electric vehicles that have entered the market and mostly they have not done well, but they have discounted their EVs quite substantially, which has made it a bit difficult for Tesla,” CEO Elon Musk said on the company’s earnings call.
The results come amid a challenging period for the automaker, which is facing slowing demand, growing competition, and falling prices. Still, Musk reiterated plans to deliver a more affordable electric model in the first half of 2025 and his view that Tesla’s value lies in its AI and robotics plays. Tesla is slated to unveil a robotaxi in the fall.
Jessica Caldwell, head of insights for Edmunds, noted that politics may “pose a significant threat to Tesla’s bottom line” after Musk endorsed former President Donald Trump in the 2024 election.
“The road ahead for Tesla is already laden with obstacles amid increasing global competition and an aging product lineup—and price cuts simply aren’t as effective as they once were in driving sales for the company,” she said in a statement shared by Talia James-Armand, comms director at Edmunds. “Giving prospective EV buyers any sort of political reason to avoid purchasing a Tesla is probably not what the company needs right now.”
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On to Tesla’s legacy competition: GM’s net income of $2.9 billion was up more than 14% YoY. The Detroit automaker raised its full-year earnings guidance as executives pointed to healthy sales of ICE trucks and SUVs.
“Our second-quarter results were driven by ongoing strong performance from our ICE business and stable pricing across the portfolio that once again outperformed our guidance assumptions for the quarter,” CFO Paul Jacobson said on the company’s earnings call.
GM’s EV deliveries rose 40% YoY in Q2, according to the company, but CEO Mary Barra announced that the automaker would delay the rollout of Buick’s first EV as part of an effort to “ensure we have a balanced approach as the market develops.” GM also will delay by six months production of an electric truck at a Michigan plant.
Ford’s profits slid from $1.9 billion a year ago to $1.8 billion in Q2, which executives blamed largely on warranty costs, while revenue grew 6% to $47.8 billion.
On the company’s earnings call, CEO Jim Farley acknowledged that Ford’s “EV journey has been humbling” but said that it “has forced us to get even more fit as a company.” The automaker recently backed off of some of its EV plans as it emphasizes a flexible strategy.
Ford’s EV business lost $1.1 billion in Q2 even as its ICE and commercial vehicle businesses reported earnings of $1.2 billion and $2.6 billion, respectively.