Tesla stock slides after earnings miss, Musk warns of 'few rough quarters'
Tesla (TSLA) reported a slight earnings and revenue miss in the second quarter after the bell on Wednesday, and CEO Elon Musk hinted at a "few rough quarters" amid mounting challenges for the automaker.
Tesla reported second quarter revenue of $22.50 billion vs. $22.64 billion expected (per Bloomberg consensus), a 12% drop compared with the $25.05 billion reported a year ago. Tesla posted adjusted earnings per share of $0.40 vs $0.42, with operating income coming in at $923 million vs. $1.23 billion expected.
Tesla's revenue from the sale of regulatory credits fell to $439 million from $890 million a year earlier, and will continue to drop following passage of the "One Big Beautiful Bill" (OBBB), the company said. Musk spent months blasting the bill, but Trump signed it into law earlier this month.
Tesla stock slumped over 9% in early trade on Thursday, after starting to slide during the company's earnings call.
Read more about Tesla's stock moves and today's market action.
CFO Vaibhav Taneja said on the earnings call that the OBBB would affect Tesla’s business, leading to a "pull forward" in sales ahead of the $7,500 tax credit expiring at the end of Q3.
“Given the abrupt change, we have limited supply of vehicles in the US this quarter,” Taneja said. “We may not be able to guarantee delivery orders placed in the later part of August and beyond.”
Musk chimed in when asked about the impact of the loss of the federal tax credit on Tesla's business. Musk said Tesla “probably could have a few rough quarters” ahead following expiration of the credit, adding, “I am not saying that we will, but we could."
Tesla said its first builds of a more affordable model occured in June, with volume production planned for the second half of 2025. Tesla also said its purpose-built robotaxi was still scheduled for volume production starting in 2026.
Taneja noted that Tesla would only ramp up volume production of the upcoming "affordable" model once the EV tax credit expired.
Read more: Live coverage of corporate earnings
"We are entering a vulnerable time for Tesla, as near-term headwinds, like auto and energy demand, subsidy cuts, and tariffs, pressure financials in the crucial transition to the long-term vision of real-world AI and higher-margin products like robotaxi and optimus," William Blair analyst Jed Dorsheimer wrote in a note to clients following Tesla's earnings release.
Tesla has expanded its robotaxi testing in Austin, Texas, with a bigger operating area and likely more vehicles coming.
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