Tesla $TSLA ( ▲ 3.52% ) reported its steepest decline in quarterly revenue in over a decade—but “first-builds” of the EV maker’s more “affordable” models could help the company recharge its sales.
The details: Tesla opted not to provide an update on its full-year deliveries forecast in its Wednesday earnings report—after pulling its guidance in April due to tariff concerns. However, the EV company’s Q2 results, which mark the automaker’s second straight month of decline, are quite revealing.
Tesla’s quarterly revenue fell 12%—with profits missing Wall Street targets.
Adjusted profit per share of 40 cents lagged the consensus of 43 cents per share.
Revenue fell to $22.5 billion for the quarter, down from $25.50 billion a year earlier.
Analysts on average were projecting $22.74 billion in revenue, according to data compiled by LSEG—amounting to $240 million short of expectations.
Why it matters: Tesla’s Q2 results reaffirm why investors have been concerned about the company’s direction in recent months—amid declining sales and the fallout over the company’s CEO, Elon Musk, and his involvement in politics.
Between the lines: All eyes are now on the EV maker’s next big play—namely, a more affordable model and robotaxis.
Tesla has begun to build versions of its “affordable” model—noting that production of the vehicle would ramp up next quarter, albeit at a slower pace than initially expected.
The company ran a small trial of robotaxis in Austin in June, with about a dozen Model Y SUVs—central to Tesla’s trillion-dollar valuation.
High hopes for a Tesla recharge from a revamped version of its best-selling Model Y, which was launched in January, appear to have fallen flat—though it’s tough to gauge exactly how the SUV has done in the market, given that no figures are available.
What they’re saying: "Tesla's disappointing results aren't surprising given the rocky road it's traveled recently. But the company maintains a strong foundation in the key growth sectors of energy storage, robotics, and AI-powered transportation. The question is whether leadership can execute on this integrated vision in this fast-moving market,” said Jacob Bourne, analyst for Emarketer.
Bottom line: Tesla is betting big on a new, more affordable model and early robotaxi trials to turn its revenue and profits around—though progress appears slower than hoped. Investors should remain cautious as execution risks and external pressures (like tariffs and Elon Musk’s political entanglements) could continue to cloud the company’s outlook in the coming months and down the road.
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