Tesla (TSLA) Q2 2025 earnings report

Tesla reported a 16% decline in automotive revenue as sales fell for a second straight quarter and again trailed analysts’ estimates.

Here’s how the company did, compared with estimates from analysts polled by LSEG:

• Earnings per share: 40 cents adjusted vs. 43 cents expected
• Revenue: $22.50 billion vs. $22.74 billion

Tesla shares dipped by more than 4% after hours, following remarks by CEO Elon Musk and finance chief Vaibhav Taneja about higher tariff costs and the expiration of federal electric vehicle tax credits.

“We probably could have a few rough quarters. I am not saying that we will, but we could,” Musk said.

Auto revenue for Tesla came in at $16.7 billion in the second quarter, down from $19.9 billion in the same quarter last year. Of that sum, revenue from sales of auto regulatory credits declined to $439 million from $890 million a year earlier.

In early July, Tesla reported a 14% year-over-year slide in vehicle deliveries to 384,000 for the second quarter. Deliveries are the closest approximation of EV sales reported by Tesla but aren’t precisely defined in its shareholder communications.

Tesla’s slump this year is partly due to backlash against the company in the U.S. and Europe, after Musk spent heavily to help reelect President Donald Trump, endorsed Germany’s extreme anti-immigrant AfD party and then led the Trump administration’s Department of Government Efficiency, or DOGE. There, Musk slashed the federal workforce, rolled back regulations and eliminated the United States Agency for International Development, or USAID.

The company’s shares were down about 18% for the year as of Wednesday’s close, making it the worst performance among tech’s megacaps. The Nasdaq is up about 9% in 2025.

The stock was flat in extended trading until the earnings call, but it began to dip after Taneja said that the “big beautiful bill” recently passed by Congress would affect Tesla’s business. The bill ends a federal $7,500 EV tax credit at the end of September.

Tesla has also shifted aspects of its supply chain to deal with Trump’s tariffs.

“Given the abrupt change, we have limited supply of vehicles in the U.S. this quarter,” Taneja said. “We may not be able to guarantee delivery orders placed in the later part of August and beyond.”

Net income fell to $1.17 billion, or 33 cents per share, in the second quarter, from $1.4 billion, or 40 cents per share, a year earlier.

In its shareholder deck, Tesla said it began its “first builds of a more affordable model in June, with volume production planned for the second half of 2025.”

Tesla has to this point put off the production of a less pricey “model 2” EV. Meanwhile, other automakers are now offering a greater variety of vehicles, and China-based competitors are selling affordable EVs with high-tech self-driving…