Tesla’s profits and sales have taken another hit as consumer backlash over Elon Musk’s political views continues to hurt the brand. In the April–June quarter, revenue dropped 12 per cent while profit fell 16 per cent — the third straight quarterly decline — as buyers turn to rival EVs.
Tesla reported $22.5 billion in revenue, down from $25.5 billion a year earlier, and a profit of $1.17 billion, or 33 cents a share, down from $1.4 billion, or 40 cents. Adjusted earnings matched Wall Street estimates at 40 cents a share. Shares fell 3 per cent in after-hours trading.
“Forrester analyst Dipanjan Chatterjee called Tesla ‘a toxic brand that is inseparable from its leader.’”
During the earnings call, Musk focused more on robotaxis and automation than car sales. Morningstar analyst Seth Goldstein noted management appears to be shifting focus away from delivery growth.
Tesla began testing a paid robotaxi service in Austin in June and plans to expand to other cities. Musk said the goal is to cover half the U.S. population by year-end, pending regulatory approval. The Austin test has seen a few issues, including one robotaxi using the wrong lane.
Tesla faces competition from Waymo and EV rivals like BYD and Volkswagen. Musk’s support for far-right politicians in Europe has also turned away buyers in the UK, France and Germany.
A new U.S. federal budget removes the $7,500 EV tax credit and emissions penalties, threatening Tesla’s revenue from carbon credits. Credit sales fell to $439 million from $890 million a year ago.
Musk warned of “several rough quarters ahead” but predicted improved economics once robotaxis scale in late 2026. Tesla plans to launch a cheaper model in the final quarter of 2025, after missing a mid-year target.
Musk also expects approval for Full Self-Driving software in parts of Europe by year-end, though the system remains a driver-assistance feature.
In robotics, Musk forecast producing 100,000 Optimus humanoid robots per month within five years. “Robots will be so common that you won’t even look up,” he said.
Gross margins fell to 17.2 per cent from 18 per cent a year earlier. One bright spot was a $284 million paper gain from Tesla’s bitcoin holdings, reversing a loss in the prior quarter.
Musk, who owns 13 per cent of Tesla, said he wants enough control to guide the company but “not so much that I can’t be thrown out if I go crazy.”