Tesla Profits Plummet
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Tesla has reported its third quarter in a row of declining profits despite billionaire founder Elon Musk stepping away from the world of politics.
The tech CEO's most famous company continues to struggle to rebound from a period of concentrated protests earlier this year, with its latest reports for the second quarter showing a disappointing return.
Newsweek contacted Tesla for more information via email.
Why It Matters
Tesla's latest financial results underscored the profound impact of CEO Elon Musk's political profile and ongoing global economic shifts on the electric vehicle giant's sales and profitability.
With a third consecutive quarter of declining profits and a double-digit revenue drop, Tesla's position as an industry leader has come under fresh scrutiny. A combination of consumer boycotts, shifting federal policies, and intensified global competition has threatened both Tesla's near-term stability and its long-term innovation plans.
What To Know
Tesla reported a 16 percent drop in second-quarter profits for 2025, with net income falling to $1.17 billion (33 cents a share) from $1.4 billion, or 40 cents a share, a year earlier.
Revenue declined 12 percent to $22.5 billion, down from $25.5 billion over the same period last year, representing the company's largest revenue fall in over a decade.
Vehicle deliveries also dropped by 13.5 percent year-on-year, from 443,956 to 384,122 units.
Cars including a cybertruck parked outside a Tesla Service and repair center in Rocklin, CA, Feb. 13, 2025.
Cars including a cybertruck parked outside a Tesla Service and repair center in Rocklin, CA, Feb. 13, 2025.
Getty Images
The weakened results came amid months of consumer backlash attributed to Musk's divisive political commentary and increasing association with far-right politicians in the U.S. and Europe.
As head of the Department of Government Efficiency (DOGE) earlier this year, Musk led the Trump administration's drive to reduce federal spending and faced fierce backlash over drastic cuts to the government's budget, including thousands of federal jobs, and the dismantling of entire agencies. Amid the uproar, Tesla cars and Tesla property have been targeted in protests against Musk's right-wing activism.
Tesla has experienced ongoing boycotts abroad, particularly in key European markets like Great Britain, France, and Germany, and encountered stiff competition from Chinese and European automakers.
Adding to the pressure, the expiration of a federal $7,500 electric vehicle tax credit and a rollback of carbon credit penalties by Congress jeopardized Tesla's regulatory credit revenue, a revenue stream that dropped to $439 million this quarter from $890 million a year ago.
Following Wednesday's financial news, Tesla shares fell 3 percent in after-hours trading. The company's stock is down by roughly half since December.
What People Are Saying
Eric Schiffer, a top tech investor and the chair of the private equity firm Patriarch Organization, told Newsweek that Musk's reputation could still recover, saying: "The ties to DOGE, in time, and the negative sentiment around it will dissipate. Innovation and new products can recapture people's imagination, and recalibrate their view of his brand and that of Tesla."
Forrester analyst Dipanjan Chatterjee told the Associated Press: "The perception of Elon Musk, its chief executive, has rubbed the sheen right out of what once was a darling and soaring automotive brand. [Tesla] is a toxic brand that is inseparable from its leader."
What Happens Next
Tesla has launched a pilot robotaxi service in Austin, Texas, with announcements of expansion into other U.S. cities. Musk suggested that hundreds of thousands of autonomous cabs could be deployed on American roads by the end of next year.
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