Tesla published financial report for the second quarter of 2025. It was another testament to how political activity of Elon Musk had a negative impact on the company.
Tesla’s financial report
The company generated $22.5 billion in revenue during the reporting period. While this is slightly better than analysts’ forecasts ($22.3 billion), it is down 12% compared to the second quarter of 2024 ($25.5 billion). At the same time, the main source of income — car sales — fell even more significantly: from $19.9 billion last year to $16.6 billion now (-16.6%). Before this report, the company had already presented disappointing sales results. In the second quarter, Tesla sold 384,122 cars, which is 14% less than a year earlier. For a company that operates on a direct sales model, this is a serious decline.
Tesla also received $439 million in revenue from the sale of regulatory loans to manufacturers of cars with internal combustion engines. However, this source of income is expected to disappear soon due to the legislative initiatives of US President Donald Trump. His plan, which is supported by the Republican Party, provides for the abolition of fines for automakers that exceed fuel consumption limits.
As a result, in the second quarter of 2025, Tesla received $1.17 billion in net profit. This is 16% less than in the same quarter of the previous year. Tesla’s operating profit decreased even more significantly by 42% year-on-year to less than $1 billion. Moreover, almost half of this profit is again attributable to regulatory credits that may soon disappear. The first quarter of 2025 also demonstrated a drop in profits.
In addition, free cash flow for the quarter amounted to only $100 million, and the company’s total cash flow decreased by $200 million to $36.8 billion. Some analysts believe that by the end of the year, Tesla could reach negative cash flow, which could trigger a sharp drop in shares.
After several years of rapid growth, this collapse looks abrupt and disorienting even for loyal investors. Tesla has become an example of what happens when a company goes «on autopilot» while its leader is doing other things.
Among the main reasons for the deterioration of Tesla’s financial performance, the company briefly mentioned economic instability caused by trade wars initiated by the Trump administrationand a decline in «consumer confidence». At the same time, the company did not recognize the impact of Elon Musk’s political activities on the decline in revenue. According to the company, this was due to lower sales volumes, lower revenues from regulatory loans, a drop in the average price of a car, and revenues from energy projects.
New cheaper Tesla models
Nevertheless, Tesla is not sitting idly by and is trying to find a way out of the situation, which has been deteriorating for a long time. In its financial report, the company noted that in June it released the first copies of cheaper models, and mass production is scheduled for the second half of 2025. This is not a completely new model, but a simplified version of the Model 3 and Model Y, which disappointed some investors. It should be noted that last year the company promised to release cheaper versions based on Model 3/Y in the first half of 2025. This period has already passed, but Tesla has not presented any new models.
Recently, near the Tesla factory in California noticed a prototype of an electric car that looks very similar to the Model Y. Analysts believe that this is a simplified version of the Model Y, which will have fewer features, cheaper materials, and possibly slightly smaller dimensions. It is expected that the base price of the new model will be about $35 thousand, although there were earlier rumors of intentions to release a cheap model costing about $25 thousand on a completely new platform. Then, allegedly, Elon Musk canceled two models under the internal names NV91 and NV92. Both were developed on a new platform that is now reserved for the Cybercab self-driving taxi project. When it became clear that demand for the Model 3 and Model Y was declining, Musk decided to abandon the new platform and use the existing production lines to create «more affordable» versions based on them.
At the same time, Tesla continues to work on the Tesla Semi truck and Cybercab robotaxi, which are expected to be mass-produced in 2026.
Unmanned taxi Robotaxi
The Robotaxi self-driving taxi project should be another lifeline for Tesla. For several years now, the company has been promising that its cars will be able to drive without a driver. But recently launched service is still operating in a very limited mode. The fleet consists of a small number of cars that move within a limited area in Austin, Texas. The cars seem to be driving autonomously, but there is still a driver in the cabin, with another car following behind for remote control.
Despite the limited launch, Elon Musk is optimistic and says that by the end of the year, the Tesla Robotaxi service will cover half of the US population». He also added that the main barrier remains obtaining regulatory approvals, as Tesla’s current service requires the mandatory presence of a company employee in each car. This makes scaling much more difficult.
As a result, even after not the best financial performance, Tesla shares did not collapse, as CEO Elon Musk promised new growth — thanks to autonomous driving, new car models, and humanoid robots.
Source: The Verge, Electrek 1, 2
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