Elon Musk’s electric vehicle company is facing stiff competition and regulatory challenges that have led to a second consecutive quarter of revenue declines. The company reported a 16% decline in automotive revenue, with sales falling for the second straight quarter and trailing analyst estimates.
Tesla’s earnings per share were lower than expected at 40 cents, adjusted from 43 cents predicted by analysts polled by LSEG. Revenue came in at $22.50 billion, down from $22.74 billion a year earlier.
The company cited higher tariff costs and the expiration of federal electric vehicle tax credits as reasons for its struggles. The US government recently passed a bill that will end a $7,500 EV tax credit at the end of September.
Tesla’s shares have been impacted by Musk’s past controversies, including his endorsement of President Donald Trump and his efforts to slash regulations. The company has also faced backlash from some critics who view it as more focused on its robotaxis and humanoid Optimus robots than on producing affordable electric vehicles.
Despite this, Tesla is investing in new technologies, such as its self-driving system. Musk aims to have autonomous ridehailing available to half the US population by the end of the year, subject to regulatory approvals. The company’s digital assets are worth $1.24 billion, up from $722 million a year ago.
Tesla has also announced plans to begin production of a more affordable model in the second half of 2025. However, other automakers and Chinese competitors are already offering a range of affordable electric vehicles with advanced features. The company’s struggles highlight the challenges it faces as it tries to remain competitive in the rapidly evolving EV market.
Source: https://www.cnbc.com/2025/07/23/tesla-tsla-q2-2025-earnings-report.html