Tesla Q2 Earnings Call: Revenue Falls, Stock Drops, and Robotaxi Expansion Plans Revealed

Tesla's Q2 revenue fell sharply, with CEO Elon Musk warning of a "rough" next few quarters. The company plans to expand Robotaxi services and launch a cheaper Model Y lookalike by the end of 2025. Tesla shares fell about 4.4% after trading hours. The CEO attributed the decline to shifting tariffs, unclear impacts from fiscal policy changes, and political sentiment. Analysts remain optimistic about Tesla's long-term prospects despite the short-term challenges.

Tesla reported a significant decline in its second-quarter (Q2) revenue, with CEO Elon Musk warning of a "rough" period ahead. The company's shares fell by approximately 4.4% after trading hours, reflecting investor concerns over the financial performance and future prospects. The earnings report highlighted a 12% year-over-year (YoY) revenue drop, marking the steepest decline in over a decade [1].

Musk attributed the downturn to a combination of factors, including shifting tariffs, uncertain fiscal policy impacts, and political sentiment. The company's automotive gross margin, excluding regulatory credits, stood at 14.96%, which was above Wall Street estimates. However, the overall revenue was impacted by a 51% dive in sales of automotive regulatory credits and a 13.5% drop in global deliveries [1].

Tesla's plans to expand its Robotaxi services and introduce a more affordable Model Y lookalike by the end of 2025 were also outlined during the earnings call. The company anticipates volume production of the cheaper model in the second half of this year, aiming to rekindle demand and counter rising competition from more affordable electric vehicles (EVs), particularly in China [1].

Analysts remain cautiously optimistic about Tesla's long-term prospects despite the current challenges. While the immediate future may present difficulties, the company's focus on expanding its vehicle offerings and entering new markets could help mitigate the short-term setbacks. The potential launch of an affordable Model Y lookalike and the continued development of Robotaxi services are seen as strategic moves to bolster demand and revenue growth [2].

References:
[1] https://nypost.com/2025/07/23/business/elon-musks-tesla-posts-steepest-sales-decline-in-over-a-decade/
[2] https://www.businessinsider.com/five-big-takeaways-from-tesla-second-quarter-earnings-call-2025-7