Tesla shares fall 12% after earnings miss

Tesla shares dropped 12% Wednesday morning after the electric car maker reported second-quarter earnings that missed expectations amid ongoing pressure in its auto business.

Elon Musk’s electric vehicle firm on Tuesday announced that automotive revenue declined 7% year on year in the June quarter to $19.9 billion while its adjusted earnings margin also fell.

The company has been forced to slash prices globally and offer discounts and incentives amid slowing sales and rising competition, especially in China — one of its key markets.

Tesla’s stock is nearly 1% lower this year to date, while the S&P 500 has risen more than 16%.

Tesla remains the top seller of electric vehicles in the U.S. by far, but is losing market share to a growing number of rivals due in part to its aging lineup of sedans and SUVs and the impact of Musk’s incendiary and political commentary.

Bulls and bears have been in a grapple over the stock, with some believing its core car business is under pressure, while others remain hopeful about a future Musk has promised around autonomous driving, AI and robotaxis.

The market has been focused on a number of other areas around the Tesla story, including when the company will introduce a new mass-market car to reinvigorate its lineup of vehicles. Musk said on the earnings call Tuesday that Tesla is on track to deliver a new “affordable” car in the first half of next year.

Robotaxis were a huge focus on the earnings call. Musk envisions a world in which owners can authorize their Tesla vehicle to be used as part of an Uber-style ride-hailing service — and where the cars would drive autonomously.

When asked when he expects the first robotaxi ride, Musk said, “I would be shocked if we cannot do it next year.”

Musk has a history of promising things on a particular timeline and not delivering. On Tuesday, he pushed back the date of the company’s robotaxi event to October, after previously saying it would take place in August.

“This is because I wanted to make some important changes that I think would improve the vehicle,” Musk said, adding that Tesla is “going to show up a couple of other things.”

Musk did not specify what these items would be.

— CNBC’s Lora Kolodny contributed to this report.