Falling EV sales combined with a lower average selling price, less cash from regulatory credits, and a decline in solar and energy storage revenue took a toll on Tesla’s bottom line in the second quarter of 2025. And a 17% growth in revenue in its services business, which includes capital generated from its Supercharging network, wasn’t enough to close the gap.
The company reported Wednesday revenue of $22.5 billion, a 12% decline from the same period last year. The company’s Q2 revenue results did show an improvement over the first quarter when it generated $19.3 billion in revenue and did manage to just barely beat analysts expectations. (Analysts polled by Yahoo finance expected revenue in the second quarter to reach $22.13 billion.)
However, net income, and more specifically operating income, is where the year-over-year gap grows larger.
Tesla reported net income of $1.17 billion in the second quarter, a 16% drop from the $1.4 billion in net income in the same period last year. Tesla reported $409 million in net income in Q1 2025 in the first quarter of the year.
Meanwhile, Tesla’s operating income fell 42% year-over-year to $923 million.
While Tesla noted pressure from an “uncertain macroeconomic environment resulting from shifting tariffs” and “unclear impacts from changes to fiscal policy and political sentiment,” the company tried to position the results as a turning point in its focus, and future.
“Q2 2025 was a seminal point in Tesla’s history: the beginning of our transition from leading the electric vehicle and renewable energy industries to also becoming a leader in AI, robotics and related services,” the company said in its shareholder letter.
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