Tesla reports sales miss as auto revenue drops for second straight quarter

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
• Revenue: $22.50 billion vs. $22.74 billion

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 a backlash against the company in the U.S. and Europe, after CEO Elon 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. At DOGE, Musk helped to slash the federal workforce, roll back regulations, and eliminate USAID.

Net income fell to $1.17 billion, or 33 cents per share in the second quarter, from $1.4 billion, or 40 cents 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, while other automakers are now offering a greater variety of vehicles, and China-based competitors are selling affordable EVs with high-tech self-driving features as a standard rather than premium option.

Tesla shares are down about 18% for the year, the worst performance among tech's megacaps, and were down slightly in extended trading on Wednesday. The Nasdaq is up about 9% in 2025.

Musk has tried to keep fans and investors focused on Tesla's future, which he envisions as being dominated by the company's robotaxis, and humanoid Optimus robots. Musk sees Tesla's robotaxis as working for their owners, making them money while they sleep. Optimus robots, he says, will be so sophisticated they can serve as factory workers or babysitters.

In June, Tesla began testing a robotaxi service in Austin, Texas, which operates in a limited area with a human valet on board. The service is accessible only to select riders, generally Tesla and Musk enthusiasts.

"We will further improve and expand the service (more vehicles covering a larger area, eventually without a safety rider) while testing in other U.S. cities in anticipation of additional launches," Tesla said in the shareholder deck, reiterating prior statements.

The company is way behind Alphabet's Waymo, which has commercial robotaxi services running in several U.S. markets, including Austin.

Tesla's robotaxi rollout is seen by bulls as a positive sign for the company, but Bank of America analysts cautioned in a recent report that it would have "immaterial financial ramifications" in the near term.

In Tesla's services and other segment, which includes revenue from its EV charging stations, gross profit rose 17% year-over-year. Tesla said was driven by, "improved Supercharging gross profit generation from increased volume," and said it has added over 2,900 net new Supercharging stalls, an 18% increase from a year earlier. The company boasts 7,377 Supercharger stations in its charging network.

Company executives will host an earnings call with analysts at 5:30 p.m. ET.

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