Tesla revenues drop 12% as Elon Musk-led carmaker braces for ‘a few rough quarters’

Tesla is bracing for "a few rough quarters" as declining electric vehicle (EV) sales, shrinking margins, and reduced U.S. government support weigh on the company. The Elon Musk-led automaker announced its second quarter results for the calendar year on Wednesday evening. Overall revenue fell 12% to $22.5 billion.

The EV maker posted a 16% year-on-year decline in automotive revenue for the April-June quarter, dropping to $16.7 billion. Adjusted net income slid 23% to $1.4 billion, or 40 cents per share. Net income by standard accounting fell to $1.2 billion.

Shares fell over 4% in after-hours trading.

CEO Elon Musk admitted that the company may face financial turbulence until its autonomous driving ambitions start to generate significant revenue by late 2025. However, there were not any questions addressed on the difficulties company faces due to Trump-Musk feud.

Tesla’s vehicle deliveries dropped 14% year-on-year to 384,000 units, the second consecutive quarterly decline. Revenue per vehicle also fell to $42,231, down $500 from the previous quarter. While sales of Model 3 and Y dropped 12%, high-end models including the Cybertruck plunged 52%.

The sales slump comes as Tesla loses ground to global rivals, especially China’s BYD, which is close to overtaking Tesla as the world’s largest EV maker. Political backlash against Musk, stemming from his support for Donald Trump and controversial policy moves, has also dented demand in key markets.

Despite weak fundamentals, Musk focused the earnings call on long-term bets, including robotaxis and humanoid robots. He claimed that Tesla’s autonomous ride-hailing could reach half of the U.S. by year-end, pending regulatory approval. However, competitors like Alphabet’s Waymo remain well ahead in deploying commercial robotaxi services.

Tesla said it had begun limited production of a lower-cost model in June, with mass production expected in the second half of 2025. Its services and other revenue, including Supercharging, grew 17% year-on-year to $3 billion.