Tesla on Wednesday reported a slump in profit, the third quarterly decline in a row, as the company cut car prices in an attempt to revive sales.
The company made $1.2 billion from April to June, down from $1.4 billion a year earlier. Sales fell to $22.5 billion from $25.5 billion in the second quarter of 2024. Tesla has not reported an increase in quarterly profit since the third quarter of 2024.
Tesla’s weak earnings are likely to reinforce concern among some investors that Elon Musk, the chief executive, is neglecting the car business while he focuses the company’s resources on autonomous driving software, self-driving taxis and humanoid robots.
Mr. Musk has said those technologies will make Tesla the most valuable company in the world. Tesla has begun testing a limited self-driving taxi service in Austin, Texas. Wall Street has largely bought into that vision, and the company’s share price is up around 50 percent since early April.
But such taxis and robots are not yet generating significant revenue for Tesla, and the company remains reliant on the car business to finance Mr. Musk’s futuristic plans.
Tesla’s sales have been losing momentum because it is not offering more affordable and appealing new models even as other carmakers, like BYD of China, have rolled out many new vehicles while slashing prices. In addition, Mr. Musk’s support for right-wing political causes has alienated many electric car buyers in Europe and the United States and has distracted him from running the company. Last month, he announced plans to form a new political party in the United States after his relationship with President Trump deteriorated.
Tesla has offered low-interest loans and other incentives to try to revive sales, but these efforts have depressed the company’s profits. Tesla’s newest model, the Cybertruck pickup, has been a flop. The company sold 4,300 Cybertrucks in the second quarter, according to Cox Automotive, a 50 percent decline from a year earlier.
The automaker had promised to begin selling a new, less expensive car by the end of the June that would allow more people to afford an electric car. But Tesla missed that deadline, and it has not explained why or when it plans to begin selling that vehicle. Nor has Tesla provided any details about the design, which analysts expect to be similar to the Model Y sport utility vehicle.
Tesla accounts for almost half of new electric vehicle sales in the United States, and the company’s problems help explain why growth of the technology has slowed in the country compared with sales in China and Europe.
Still, the market for electric vehicles continues to grow even as Tesla sales fall. In the United States, sales of electric vehicles grew 1.5 percent in the first half of 2025, according to Cox Automotive. Growth was 32 percent in China, and 26 percent in Europe, according to Rho Motion, a research firm.
In Europe, Tesla has fallen behind Volkswagen as the leading maker of electric cars after sales fell 33 percent in the first half of the year, according to JATO Dynamics.
More challenges await Tesla. The company is less vulnerable to Mr. Trump’s tariffs than other carmakers because it manufactures all the cars that it sells in the United States in California and Texas. But Tesla will have to pay tariffs on imported raw materials and components.
The Republican domestic policy bill passed this month will eliminate a tax break of up to $7,500 on electric vehicle purchases and leases after September. That will raise the cost to buy Teslas because most of the company’s models have qualified for the credit.
The bill also abolished penalties for carmakers that violated clean air standards. That will hurt Tesla because it makes hundreds of millions of dollars every few months by selling clean air credits to carmakers that fall short of those standards.
In the first quarter, revenue from the credits exceeded Tesla’s profit.
Jack Ewing covers the auto industry for The Times, with an emphasis on electric vehicles.
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