Cheap cars hit Tesla profits as tech pivot stalls

Tesla’s long-promised transition from car-making giant to AI-driven tech titan has suffered a setback, as returns on the firm’s core vehicle line-up continue to erode.

The company reported a sharp drop in profits for the second quarter this year, after the average selling price of its cars slumped. The operating margin dropped to just 1.4% for the quarter ending June, compared with 4.1% in the same period last year despite delivering more cars, at 451,758 – up 10%.