Tesla reported a 23% drop in adjusted earnings for Q2, with net income falling to $1.4 billion down $419 million from a year ago. This follows a 13.5% dip in sales, marking another tough quarter for the EV giant.
Core auto revenue slid 16%, and the average revenue per vehicle dropped by $500 to $42,231. Sales of Tesla’s Model Y and Model 3 declined 12%, while sales of higher-end models, including the Cybertruck, plunged 52%.
The earnings miss sent Tesla shares down 2% in after-hours trading. Analysts attribute the slump to growing global EV competition, especially from China’s BYD, and backlash tied to CEO Elon Musk’s political controversies.
Tesla also faces major financial threats ahead. The expiration of a $7,500 US EV tax credit in October could impact sales, and a new US law eliminating penalties for emissions violations will likely end the company’s lucrative regulatory credit sales — a key revenue stream since 2019.
Musk avoided addressing the earnings drop directly during the investor call, instead focusing on future ambitions like a US-wide robotaxi rollout and mass production of its humanoid robot, Optimus. However, Tesla’s robotaxi pilot remains limited, while rivals like Waymo lead with hundreds of thousands of paid rides weekly.
