Tesla reports biggest quarterly revenue decline in more than a decade
Revenue fell to $22.5bn for the April-June quarter from $25.5bn a year earlier, according to its earnings report, which Tesla released after the closing bell on Wall Street. Analysts on average were expecting revenue of $22.74bn, according to data compiled by LSEG.
Revenue from car sales declined by 16 percent. Tesla attributed the revenue dip to a decline in vehicle deliveries. Earlier this month, it reported a 14 percent decline in car deliveries in the second quarter.
Investors are worried about whether Musk will be able to give enough time and attention to Tesla after he locked horns with United States President Donald Trump by forming a new political party this month. Weeks earlier, he had promised that he would cut back on government work and focus on his companies.
Musk's connections to the Trump administration and layoffs across the US government when he headed the Department of Government Efficiency weighed on its US reputation. Meanwhile, the billionaire's endorsements of the far-right AfD party in Germany have affected the brand's reputation in Europe.
A series of high-profile executive exits, including last month of a longtime Musk confidant who oversaw sales and manufacturing in North America and Europe, is also adding to the concerns.
The company reported a second straight quarterly revenue drop, despite rolling out a much-awaited refreshed version of its best-selling Model Y SUV that investors had hoped would rekindle demand.
Much of the company's trillion-dollar valuation hangs on its bet on its robotaxi service – a small trial of which started in Austin, Texas, last month – and developing humanoid robots. On Wednesday, Bloomberg News reported that Tesla has been in talks with the state of Nevada about introducing robotaxi services there.
Analysts believe that this will keep the automaker on pace for growth in future quarters.
'We are at a 'positive crossroads' in the Tesla story: Musk is laser focused as CEO, Robotaxi/autonomous expansion has begun, demand stabilisation has begun especially in China, and Tesla is about to embark on an aggressive AI-focused strategy that, we believe, will include owning a significant piece of xAI,' Dan Ives, an analyst at the financial services company Wedbush Securities, said in a note provided to Al Jazeera.
xAI is Musk's AI firm which also makes the chatbot Grok.
'While near-term and this quarter the numbers are nothing to write home about, we believe investors are instead focused on the AI future at Tesla, with a motivated Musk back driving Tesla's future,' Ives said.
Tesla's stock closed the trading day in positive territory, up by 0.1, but has tumbled in after-hours trading, down by 0.3 percent.
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