Tesla Earnings: Musk's Automaker Reports Sharp Drop In Revenue
Topline
Tesla reported drops in revenue and profit Wednesday, as it shared second quarter earnings following a historic decline in quarterly deliveries in the wake of Elon Musk’s alliance with Trump and their headline-grabbing fallout.
Economists expect double-digit drops for the automaker’s top and bottom lines after a record decline … More
Key Facts
Tesla reported a 12% drop in quarterly revenue at $22.5 billion, which topped FactSet expectations by $22 million but marked the company’s worst revenue decline in over a decade, according to Reuters.
Tesla attributed the slump to its 13% decline in vehicle deliveries during the second quarter and less cash from selling regulatory credits, with the 13% drop surpassing the automaker’s largest year-over-year record set in the previous quarter.
Net income for the company fell to $1.17 billion, a 16% drop year-over-year.
Automotive regulatory credits netted Tesla $439 million during the second quarter, down nearly $600 million from the first quarter, as Trump’s electric vehicle policies are expected to further impact Tesla’s profit from the credits in future quarters.
Shares of the automaker are up a fraction of a percent following the publication of its earnings, barely maintaining a streak of gains that began on July 7.
Crucial Quote
Wedbush Securities analyst Dan Ives wrote Tuesday the “set-up” to Tesla earnings is a “dramatically different one than three months ago.” He predicted Tesla’s AI initiatives would be “front and center for investors” on Tesla’s earnings call as analysts would be “listening carefully” about the company’s possible investment into Musk’s xAI.
Key Background
Tesla’s shares surged in recent months after Musk’s role as a special government employee with the Trump administration endedthough the stock has declined more than 4% over the last month. New car registrations for the company fell through the first five months of the year in Europe, China and California. Musk’s separation from President Donald Trump and subsequent falloutwhich exploded into a sharp back-and-forth on social media, continued in recent weeks as he criticized Trump’s spending bill. Analysts have expressed some optimism for Tesla, however, after the company rolled out a limited launch of its anticipated robotaxi driverless vehicle service in Austin, Texas, in June.
What To Watch For
Musk, who has promised self-driving cars for several years, said during Tesla’s investor call the company will probably have fully autonomous ride-hailing accessible to half the U.S. population by the end of the year, noting, “That’s at least our goal, subject to regulatory approvals.”
