At the end of the quarter, Tesla’s operating profit margin fell to a three-year low.

For the fourth quarter in a row, as the next financial report showed, the company’s operating profit margin has been declining, and according to the results of the past, it dropped year-on-year from 18.7 to 14.4%, reaching a three-year low. Revenue rose 2% to $25.5 billion, beating market expectations, but that didn’t stop Tesla shares from falling nearly 8% in after-hours trading.

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Investors carefully monitor the dynamics of specific earnings of public companies in terms of per share. At Tesla, this figure dropped to 52 cents per share last quarter, which is below the forecast of 62 cents per share. Direct revenue from sales of Tesla electric vehicles decreased by 7% from $21.27 to $19.9 billion. Typically, the company received regulatory loans, as proceeds from other automakers wishing to compensate for the non-compliance of their production activities with environmental goals, totaling $890 million. and this is three times more than the result of the same period last year. In this regard, Tesla’s revenues under this heading were record high. The decline in the electric vehicle market likely had an impact, forcing other market participants to sell more cars with internal combustion engines and at the same time compensate for this conditional environmental damage with regulatory credits.

At Tesla itself, electric vehicle shipments have been declining year-on-year for the second quarter in a row. It is trying to stimulate demand with various kinds of discounts, so these efforts have a negative impact on the operating profit margin, which at the end of the last quarter decreased year-on-year from 18.7 to 14.4%. The company’s net profit fell immediately by 45% to $1.48 billion. For a company that has always been famous for its ability to extract more profit from the production of electric vehicles than its competitors, this was a serious blow to the investment attractiveness of the shares. Capital expenditures in the second quarter increased by 10% to $2.27 billion. The company spent $600 million on the development of infrastructure for artificial intelligence alone. The head of the company said that the Dojo supercomputer will become competitive compared to computing centers based on Nvidia components. Tesla now needs to not only develop autopilot for electric vehicles, but also invest in improving future humanoid robots Optimus. Tesla’s operating costs rose 39% in the second quarter to $2.97 billion.

In its presentation to investors, Tesla attributes the decline in business profitability to a simultaneous decline in the average selling price of electric vehicles and a decline in sales volumes of the brand’s most popular models. In large regional markets like China and Germany, Tesla now offers electric car loans for four or five years with zero interest rates, which is costly for the company in the face of high key rates from regional central banks.

Tellingly, in Tesla’s energy business, revenue almost doubled over the year to $3 billion. Essentially, the company was able to supply stationary electricity storage systems with a large number of batteries, since demand in the electric vehicle segment is no longer growing at the same rate. The number of installed energy storage systems reached record levels in the second quarter.

Elon Musk said at a quarterly conference that Tesla is putting on pause its own plans to build a plant in Mexico. It was originally planned that low-cost Tesla electric cars would be produced in Mexico near the border with the company’s now native Texas. Musk is now concerned about Donald Trump’s promises to impose higher duties on cars imported from Mexico, which casts doubt on the project’s prospects. But from this statement by Musk it becomes clear that he has virtually no doubt about Trump’s victory in the upcoming US presidential elections.