Tesla misses Wall Street expectations on revenue, earnings per share in second quarter earnings
Tesla's double-digit percentage revenue decline was primarily attributed to the ongoing slump in vehicle deliveries. Improved energy storage deployments and new service offerings provided minor offsets, but could not outweigh the hit from lagging car sales and persistent price competition across the electric vehicle industry.
Operating income also fell significantly, coming in at $923 million, which was below consensus estimates of $1.23 billion. Net income dropped year over year as margins continued to shrink, pressured by lower average selling prices, higher raw material costs, and global trade headwinds.
Tesla had previously reported deliveries of more than 384,000 vehicles in the quarter—a drop of more than 13% from the previous year—with production holding steady at just over 410,000 vehicles. This marks the second quarter in a row of reduced year-over-year deliveries.
Wall Street had entered the earnings week with tepid expectations, citing declining sales, compressed margins, and elevated spending on research and development as factors dampening short-term prospects. While Tesla's results were slightly weaker than forecast, shares saw only a modest uptick in after-hours trading, as investors focused on the company's long-term ambitions rather than current sales struggles.
Robotaxi, AI, and a new affordable model
Tesla's leadership used the earnings release to reaffirm its pivot toward next-generation technologies. CEO Elon Musk highlighted the launch of Tesla's first Robotaxi pilot service in Austin, along with vague remarks related to the ongoing development of a long-rumored 'more affordable' Tesla model.
Musk signaled that, amid stiffer automotive competition, Tesla's strategy increasingly centers on breakthroughs in autonomy, artificial intelligence, and energy solutions as pillars for future growth.
Multiple challenges continue to weigh on Tesla, including expiring U.S. electric vehicle tax credits in October 2025, ongoing trade disputes and tariffs affecting costs and global supply, and intensifying competition from established automakers and Chinese EV brands. More generally, the brand has growing reputational issues associated with Musk and his support of President Donald Trump, even after the two had a falling out that coincided with fierce criticism of each upon the other. During Musk's brief role helping the administration, his sometimes successful attempts at slashing government spending provoked ire from much of Tesla's traditional customer base, with environmentalist and left-leaning politics. Other investors said they wished the distraction would go away.
For this story, Fortune used generative AI to help with an initial draft. An editor verified the accuracy of the information before publishing.
This story was originally featured on Fortune.com
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
USA Today
27 minutes ago
- USA Today
US stock futures higher as investors digest earnings, tariffs
U.S. stock futures are higher as investors digested earnings, tariffs and what President Donald Trump's pick to replace an outgoing Federal Reserve governor may mean for the economy, interest rates and Bitcoin. Trump chose Stephen Miran, who chairs the White House's Council of Economic Advisers, to serve the roughly six months remaining in the term of former Fed Governor Adriana Kugler, who resigned on Aug. 1. Miran has been a critic of the Fed and a supporter of Bitcoin. Meanwhile, Expedia, Pinterest, Sweetgreen and Instacart were among the companies that reported after the bell. General Motors also said it would continue to buy Chinese batteries for its electric vehicles despite tariffs. At 6 a.m. ET, futures linked to the blue-chip Dow rose 0.18%, while the broad S&P 500 futures added 0.27% and tech-laden Nasdaq futures gained 0.30%. Corporate news Cryptocurrency Stephen Miran, chair of the Council of Economic Advisors and Trump's pick to replace Adriana Kugler as a Fed governor, is a Bitcoin supporter. He has publicly posted supportive comments on social media 'I think that crypto has a big role potentially to play in innovation and ushering in another Trump Administration economic boom,' he previously stated. Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at mjlee@ and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning.
Business Insider
29 minutes ago
- Business Insider
xAI has hired 14 Meta employees this year as the AI talent war rages on
The great AI talent tug-of-war is underway — and xAI is now in the ring. Elon Musk's startup has yanked at least 14 researchers and engineers from Meta's grip since January, according to a Business Insider analysis of LinkedIn profiles. Some have joined as recently as a few weeks ago, according to their profiles, showing the battle to secure the brightest minds in AI is far from over as big tech rivals continue to raid each other's ranks. That includes people like Xinlei Chen, who was a research scientist at Meta's Fundamental AI Research, or FAIR, team until he jumped ship in June, per his LinkedIn. Chen focuses on multimodal forms of AI, like images and videos, a field Meta's new 'superintelligence' team is aggressively hiring for. So does Ching-Yao Chuang, another former Meta research scientist who left for xAI in May. Others Meta departures include Alan Rice, a former data center manager who left in April and is now working for xAI based out of Memphis, Tennessee, the site of xAI's biggest supercomputer hub. Sheng Sen — an AI research scientist who helped scale Meta's flagship Llama AI models — also joined xAI in April, according to his LinkedIn. Spokespeople for Meta and xAI did not respond to Business Insider's requests for comment. "Many strong Meta engineers have and are joining xAI and without the need for insane initial comp (still great, but not unsustainably high)," Musk said in an X post on Sunday. "Also, xAI has vastly more market cap growth potential than Meta. And we are hyper merit-based: do something great and your comp can shift substantially higher." Just last month, Meta hired Shengjia Zhao — a co-creator of ChatGPT — as chief scientist of its new Superintelligence Labs, as CEO Mark Zuckerberg has been offering multimillion-dollar compensation packages to lure AI experts away from rivals. Meta also brought on three researchers who helped launch OpenAI's Zurich office. Anthropic CEO Dario Amodei has been vocal about Zuckerberg's tactic of dangling hefty compensation offers. In an episode of the "Big Technology Podcast," which aired last week, Amodei said he thinks Meta is "trying to buy something that cannot be bought and that is alignment with the mission." Amodei said Anthropopic employees received and turned down lucrative offers, and the company chose not to counter with inflated individual pay packages because it went against its principles of fairness and could damage company culture. "If Mark Zuckerberg throws a dart at a dart board and hits your name, it doesn't mean you should be paid 10x more than the guy next to you who's just as skilled or talented," he said. Elsewhere in the AI talent shuffle, Microsoft has poached more than two dozen Google employees in recent months, The Wall Street Journal reported this week. xAI has also poached a number of engineers from Musk's other companies over the years. The company currently employs about 40 former Tesla employees and a handful of former SpaceX staffers, a LinkedIn analysis shows. Business Insider previously reported that xAI hired a number of Tesla engineers shortly after the electric carmaker initiated mass layoffs in April 2024. xAI employs around 1,200 people, including an army of AI tutors that train the company's chatbot, internal documentation shows. Earlier this year, an internal xAI organizational chart showed the company's project lead for its Colossus data center was Daniel Rowland. A hardware engineer named Daniel Rowland has worked on Tesla's Dojo supercomputer since 2018, according to his LinkedIn profile and internal documentation reviewed by Business Insider at the time.
Bloomberg
29 minutes ago
- Bloomberg
China Defends Buying Russian Oil After Trump's Tariff Threat
China said its imports of Russian oil are justified, pushing back against US threats of new tariffs after Washington slapped secondary levies on India for buying energy from Moscow. 'It is legitimate and lawful for China to conduct normal economic, trade and energy cooperation with all countries around the world, including Russia,' the Chinese Foreign Ministry said Friday in a statement to Bloomberg News. 'We will continue to adopt reasonable energy security measures in accordance with our national interests.'
