Tesla’s Earnings Miss Estimates as Sales Keep Falling

Tesla (TSLA) posted second-quarter earnings that missed analysts’ expectations as sales fell for the second straight quarter.

The electric vehicle maker reported adjusted earnings per share of $0.40 on revenue that fell 12% year-over-year to $22.5 billion, below estimates compiled by Visible Alpha.

CEO Elon Musk told investors on Tesla’s earnings call that the company could also have a “few rough quarters” ahead with EV credits in the U.S. set to expire after the passage of the “One Big Beautiful Bill” signed by President Trump earlier this month.

“We have near-term challenges in our business due to the negative impacts of the bill and tariffs,” Tesla CFO Vaibhav Taneja said. “However, the investments that we have made for AI, robotics, and our lead in energy, sets us up for a bright future.”

Shares of Tesla dropped close to 5% in extended trading following the comments. They’ve lost nearly a fifth of their value in 2025 through Wednesday’s close.

New Vehicle Plans Are Still on Track, Musk Says

Musk said the EV maker remains on schedule with plans to launch new vehicles this year, including production of a more affordable model. Tesla said it plans to scale production of the yet-to-be-announced vehicle in the second half of this year.

Musk also told investors more details on Tesla’s AI plans, and Optimus humanoid robot would come at its shareholder meeting in November.

Ahead of Wednesday’s earnings call, bullish analysts at Wedbush suggested they would be more focused on Tesla’s potential in self-driving software, robotics, and AI than its short-term sales results.

Last quarter, Tesla’s results fell short of estimates, but shares rose in the days that followed as CEO Elon Musk said he would spend more time at Tesla as he left his role with the Trump administration in May. In the months since, Musk has distanced himself from Trump as he attacked the president’s tax and spending law, and Trump fired back with his own criticisms of Musk.

Tech giant and fellow Magnificent Seven member Google parent Alphabet (GOOGL) reported after the bell Wednesday as well, with results that topped expectations, driven by rising cloud and search sales. It’s a key competitor for Tesla in the robotaxi space, with Musk calling out Alphabet’s Waymo during Wednesday’s call. Tesla is “much better than Google” at real-world AI, Musk said.

This article has been updated since it was first published to include additional information and reflect more recent share price values.