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Tesla's second-quarter performance has rattled investor confidence, as the electric carmaker posted another sharp drop in revenue and profits, underscoring growing operational and political pressures. Shares fell 6% in premarket trading Thursday, compounding a year-to-date slide of nearly 18%.
The company's adjusted net income declined 23% from a year earlier, totaling $1.4 billion, while overall revenue slipped 12%. Automotive revenue, the core of Tesla's business, fell 16% to $16.7 billion. Each vehicle brought in $500 less than the previous quarter, pushing the average revenue per car down to $42,231. The sales decline was particularly steep for the Cybertruck and other high-end models, which fell 52% year-over-year.
"Autonomy is the story," Elon Musk told investors, shifting focus to Tesla's limited robotaxi rollout in Austin. He projected broader access by year's end, claiming autonomy could eventually elevate Tesla's value "to stratospheric levels."
Musk did not directly address the sales slump during the earnings call. However, he acknowledged that Tesla "probably could have a few rough quarters," linking the near-term outlook to the expiration of the $7,500 U.S. federal EV tax credit this October. U.S. buyers account for almost half of Tesla's sales.
Competition has intensified, especially from Chinese EV manufacturers. Tesla is on track to lose its global EV sales lead to BYD, which doesn't even operate in the U.S. European registration data released Thursday showed further declines for Tesla in that market.
Meanwhile, regulatory credit revenue, a $11 billion lifeline since 2019, is under threat. A Republican-backed spending bill eliminates penalties for emissions noncompliance, reducing demand for Tesla's credits. Without them, Tesla would have posted a loss in Q1.
Morningstar analyst Seth Goldstein noted, "The absence of forward guidance suggests management no longer expects volume growth this year."
