Tesla (NASDAQ: TSLA) reported Q2 2025 results, with total revenue falling 12% YoY to $22.50 billion but rebounded 16% from Q1 2025.
Breaking it down, automotive sales dropped 16% YoY to $15.79 billion despite a 16% sequential bounce. In addition, regulatory credit revenue slid 51% YoY to $439 million, removing a key profit crutch. Energy revenue contracted 7% YoY while Services and Other climbed 17%.
Gross profit contracted 15% YoY to $3.88 billion, yet margin ticked up quarter-over-quarter to 17.2% as raw material costs eased. Operating expenses were relatively flat YoY but rose 7% sequentially to $2.96 billion, driven by a 48% surge in R&D tied to autonomy projects. Operating income therefore plunged 42% YoY to $923 million and the 4.1% operating margin barely recovers half of last year’s 6.3% benchmark.
Net income fell 16% YoY to $1.17 billion, though it tripled versus Q1’s post-price war period. Adjusted net income of $1.39 billion was 23% lower than a year ago, with adjusted EBITDA down 7% YoY to $3.40 billion.
Operating cash flow slid 30% YoY to $2.54 billion. Heavier capex of $2.39 billion, a 60% jump QoQ, left free cash flow at a meagre $146 million—an 89% YoY collapse and a fraction of the $760 million Wall Street expected.
The cash burn trimmed the cash and equivalents balance to $36.78 billion, down $214 million sequentially but still 20% above last year. Inventory crept to $14.57 billion, pushing days of supply to 24 versus 18 a year earlier.
Vehicle production was flat YoY at 410,244 units, yet deliveries retreated 13% to 384,122. Other model deliveries halved, and only Model 3/Y production provided a slim 3% YoY lift. Supercharger connectors increased 18% YoY to 70,228, while the mobile-service fleet shrank 11%.
As per usual, Musk sounded equal parts visionary and promotional on the Q2 earnings call, declaring that “we will have robotaxis for half of the US population by year-end”—a five-month sprint that even the most bullish analysts view as aspirational at best.
The investor earnings deck devoted four of its 30 pages to the planned retro-futurist “Tesla Diner,” while devoting barely a slide to the shrinking auto margins that still fund the company’s AI ambitions.
The Q2 earnings report is the first to be released after Musk’s public spat with President Donald Trump, ending with the Tesla chief relinquishing his position as DOGE chief, an event that eroded much of Tesla’s valuation year-to-date. Following the earnings release, the firm saw its shares fall over 6% further pre-market.
Looking ahead, Tesla warns that tariffs, election year policy shifts, and the pace of autonomy rollout could all skew results. The company says it has “sufficient liquidity” to fund its plans to wring more volume from existing plants, roll out a cheaper model in early 2025, and pivot profit growth toward software and fleet services. However, the carmaker did not specify figures and admitted it is “difficult to measure” the effects of shifting global trade and fiscal policies.
Tesla last traded at $332.56 on the NASDAQ.
Information for this briefing was found via the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
One Response
Cheaper model in 2025? We are already past the halfway mark…..robotaxis to half the US population by 2026……blowhard stuff for sure. Musk’s greatest talent is marketing and ideas. He has ideas for sure. Please spare us the “futuristic Tesla diner.” Only Tesla bros might want that abomination.