Tesla Q2 sales fall 12%; company says 2025 vehicle launches remain on track and more affordable model still coming

Tesla posted second-quarter earnings in line with analysts’ expectations despite a year-on-year drop in sales, and the company said its plans for new models this year and a more affordable model next year remain “on track.”

Shares were up 0.1% after-hours.

The company posted adjusted earnings per share of $0.40, matching FactSet’s consensus estimate. Total revenues were $22.5 billion, down 12% year on year, coming in slightly above expectations of $22.28 billion.

Net income dropped 16% year on year to $1.2 billion.

Auto sales down from last year

Automobile revenue dropped 16% year on year to $16.6 billion. Earlier this month, Tesla reported its largest quarterly drop in auto deliveries ever, selling 384,122 vehicles in the second quarter, which was about 60,000 fewer than the same period the year prior.

Tesla said that its “more affordable model” is on track for initial production next year, but few details are known about the long-awaited vehicle.

Robotaxi + Cybercab

Tesla didn’t give many specifics in its update on its long-promised robotaxi service. Tesla recently rolled out its first robotaxi rides in Austin, in a limited test for insiders with somewhere between 10 and 20 vehicles.

The company did say Wednesday that its Cybercab, the car designed to eventually operate those robotaxi routes, was “scheduled for volume production starting in 2026.”

For perspective, Tesla rival Alphabet’s Waymo service has over 1,500 driverless cars giving rides in five major markets, and it recently said that it’s provided over 10 million paid trips and is doing more than 250,000 rides per week.

Regulatory credits

During Q2, Tesla made $435 million from regulatory credit sales. Tesla has made hundreds of millions per quarter — $595 million in Q1 and an expected $622 million in Q2 — selling such credits to other carmakers to avoid fines for not having sold enough electric vehicles.

But that easy money may be drying up. President Trump’s massive tax bill that just became law could threaten more than half of Tesla’s profit, according to JPMorgan.

Full Self-Driving (Unsupervised)

Tesla did not give an update on another long-awaited feature: “unsupervised full self-driving.” The closest news related to this was a note in the earnings release that said one customer received their new Model Y via “the world’s first autonomous delivery” as the car drove itself across town, including highways, on a 30-minute trip.

Cars, robots, taxis, and... fast food?

There wasn’t a mention in the earnings about the new Tesla Diner that just opened up in West Hollywood, California. We’ll have to wait and see until next quarter how much the Tesla Diner’s $8 Wagyu Beef Chili Cup contributes to profits.