Tesla Shares Plummet Amid Investor Concerns Over Profit Margins

Tesla shares dropped 11%, erasing nearly $90 billion in market value as CEO Elon Musk's announcements about future products failed to allay investor concerns over declining profit margins. The company reported its lowest quarterly profit margin in five years, and its stock has slid from over $1 trillion in 2021 to $700 billion.

Tesla shares fell by 11% on Wednesday, wiping out almost $90 billion in market value. Investors remained unconvinced by CEO Elon Musk's talks on future products, such as humanoid robots and robotaxis, amidst concerns over the company's shrinking profit margins.

On Tuesday, Tesla reported its lowest quarterly profit margin in five years. This marks the fourth consecutive quarter where Tesla's earnings per share missed estimates. As a result, the company's market capitalization has dropped significantly, from over $1 trillion in 2021 to $700 billion.

A poor showing in second-quarter reports further impacted Tesla, alongside Alphabet, which flagged higher capital expenses. Tesla's delivery figures have been dwindling for two quarters, and it has yet to introduce a lower-cost model that was highly anticipated. Price cuts and incentives have been employed to boost sales, but competition remains high, especially from China's BYD, which has been expanding its sales lead.

(With inputs from agencies.)