Tesla's Q2 performance declines in both metrics, Musk warns of "poor performance in the coming quarters," increasing concerns

According to the Zhitong Finance APP, Tesla (TSLA.US) recently released its second-quarter financial report, which shows that its core financial indicators have declined for the second consecutive quarter. The company's total revenue for the quarter decreased by 16% year-on-year to $22.5 billion, falling short of analysts' expectations of $22.74 billion; adjusted earnings per share were $0.40, also below the market expectation of $0.43. The automotive business, as the core segment, saw revenue shrink from $19.9 billion in the same period last year to $16.7 billion, with regulatory credit sales revenue dropping from $890 million to $439 million, becoming a significant factor dragging down performance.

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After the financial report was released, Tesla's stock price fell by as much as 5% in after-hours trading. Previously, the company's CEO Elon Musk had warned that "the next few quarters may perform poorly," and the further statements made by CFO Vaibhav Taneja during the earnings call intensified market concerns.

He revealed that a bill recently passed by the U.S. Congress will eliminate the $7,500 federal tax credit for electric vehicles by the end of the third quarter, which will directly impact Tesla's business; at the same time, the company needs to adjust its supply chain to cope with the tariff policies of the Trump administration. Taneja specifically noted: "Considering the sudden changes in the supply chain, vehicle supply in the U.S. market will be limited this quarter, and there is uncertainty regarding order deliveries from late August onwards. We advise consumers with car purchase needs to place orders as early as possible."

From the operational data, Tesla's net profit in the second quarter fell from $1.4 billion (EPS of $0.40) in the same period last year to $1.17 billion (EPS of $0.33). In terms of delivery volume, the second-quarter data released in early July showed global deliveries of 384,000 electric vehicles, a year-on-year decline of 14%. Although Tesla has not explicitly defined "delivery volume" as final sales, this metric is still regarded as the closest reference to actual sales conditions.

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The pressure on performance is partly attributed to resistance sentiments in the U.S. and European markets. Musk has recently been embroiled in political controversies, including spending to support Trump's re-election, backing the German far-right anti-immigration party Alternative for Germany (AfD), and promoting cuts to federal personnel, deregulation, and the elimination of the U.S. Agency for International Development (USAID) within the Trump administration-led "Department of Government Efficiency" (DOGE). These actions have triggered negative reactions from some consumers and institutions Since the beginning of this year, Tesla's stock price has fallen by about 18%, making it the weakest performer among tech giants, while the Nasdaq index has risen by about 9% during the same period. Despite facing pressure, Tesla is still advancing its new product layout: the shareholder meeting disclosed that a more affordable model has started production in June, with plans for mass production in the second half of 2025. However, the production of this model (previously referred to as "Model 2" by the outside world) has been delayed multiple times, while Chinese competitors are accelerating the launch of economical electric vehicles equipped with advanced autonomous driving features, creating direct competition.

Musk reiterated during the earnings call that Tesla's future will rely on autonomous taxi services and the humanoid robot Optimus. He described the autonomous taxi as "a money-making tool for owners," stating that it can provide services while the owner rests; Optimus is positioned as a factory worker or a household nanny.

Currently, Tesla is testing its autonomous taxi service in a limited area in Austin, Texas, with vehicles equipped with safety drivers and only open to specific users. The company plans to expand coverage and gradually eliminate safety drivers, but current progress is significantly lagging behind Alphabet's Waymo, which has been operating commercial autonomous driving services in multiple locations, including Austin.

Despite regulatory hurdles in promoting autonomous driving technology, Musk stated that "technically, ride-hailing services could cover 50% of the U.S. population by the end of the year," but it requires regulatory approval. Notably, he had underestimated the regulatory difficulties related to this a year ago during the earnings call.

In other business aspects, Tesla's services and other segments (including charging services) saw a gross profit increase of 17% year-on-year, mainly due to the rise in sales of supercharging stations. The company added over 2,900 supercharging stations in the quarter, bringing the total to 7,377. Additionally, the company's digital asset scale increased from $722 million a year ago to $1.24 billion.

Overall, Tesla is facing multiple challenges: policy changes in core markets, intensified competition, delays in new products, and regulatory uncertainties. Although Musk has painted a future picture of autonomous driving and robotics, the short-term performance pressures and market skepticism still need to be gradually resolved