Tesla, once the unstoppable force in electric vehicles, is now struggling on multiple fronts. From disappointing earnings and falling stock prices to CEO Elon Musk’s political controversies and risky robotaxi bets, the company’s future appears more uncertain than ever. Here's a breakdown of Tesla's rough second quarter—and why the pressure is mounting.
Tesla’s Financial Woes Deepen Amid Political Fallout and Slumping Sales
Tesla’s financial health is showing signs of serious strain, with CEO Elon Musk’s political behavior drawing growing scrutiny. The electric carmaker reported on Wednesday that both revenue and profit dropped in the second quarter compared to the same period last year—marking Tesla’s second consecutive disappointing earnings report.
Though Tesla remains the top EV seller in the U.S., the latest results paint a bleak picture with no clear solution in sight. The brand has taken a reputational hit and become a target for street protests.
During a conference call with analysts, Musk unveiled ambitious plans to expand Tesla’s robotaxi initiative—currently operating in a limited capacity in Austin, Texas. His goal? To make self-driving Teslas available to half of the U.S. population by year’s end. However, this bold vision hinges heavily on regulatory approvals and the technology’s safety record.
Tesla’s robotaxi program lags behind competitors like Waymo and still relies on human safety observers. Musk stressed its importance, especially in markets like California, Arizona, and Florida, saying, “Autonomy is the story.”
Still, Wall Street wasn’t impressed. Tesla’s stock dropped around 8% Thursday morning and is now down over 36% from its December high.
Financially, Tesla’s revenue fell to $22.5 billion for Q2—down 12% year over year—while earnings per share slipped 23% to 40 cents. Despite these declines, Tesla described the quarter as a “seminal point,” signaling its transition toward AI, robotics, and related services.
Meanwhile, Musk’s controversial political involvement continues to generate headlines. His flirtation with far-right politics, his brief advisory role under former President Donald Trump, and their subsequent falling out have polarized public opinion. Though Musk has floated starting a political party, no concrete steps have been taken.
The earnings period from April through June overlapped with Musk’s stint in the White House, which ended on May 30. Tesla had already warned of weak vehicle delivery numbers—a 14% drop in Q2 compared to the year before. It marked the second quarter in a row of falling deliveries, as competition from Chinese EV makers and branding issues take a toll.
Musk has tried to pivot attention to other ventures—like Tesla’s new diner and drive-in in West Hollywood, launched this Monday. On the conference call, he said the venue was a “shiny beacon of hope in an otherwise bleak urban landscape.”
Yet details on Tesla’s robotaxi progress remain vague. CFO Vaibhav Taneja revealed the Austin service currently uses only a “handful of vehicles” and has logged just 7,000 miles since launching June 22—an average of only 226 miles per day.
Adding to the complexity, Musk has increasingly intertwined his business empire. His AI company, xAI, was merged with his social media platform, X, in March. SpaceX is now an xAI investor. Just recently, Tesla began integrating xAI’s chatbot Grok into its vehicles—just days after Grok made headlines for extremist content. Musk says Tesla may invest further in xAI, but any such move would be put to a shareholder vote.
Market expectations were higher. Analysts predicted $22.74 billion in revenue and 43 cents per share, according to LSEG estimates.
Public sentiment around Musk has soured. Polling data from statistician Nate Silver’s site shows 58% of Americans hold an unfavorable view of Musk, while only 33% view him positively.
Protests, too, are ramping up. “Tesla Takedown” demonstrations are held weekly, with over 30 protests planned for this weekend alone—including one at the newly opened Tesla Diner. The activist group behind the protests reacted to Tesla’s earnings by stating, “Sooner or later, investors will wake up to the truth: Tesla is nothing but smoke, mirrors, and missed deadlines.”
Meanwhile, Tesla faces mounting legal and regulatory pressures. Ongoing lawsuits in Miami and Oakland are probing whether Tesla overstated the capabilities of its Autopilot and Full Self-Driving systems. Federal regulators at the National Highway Traffic Safety Administration are also investigating their safety, particularly in foggy or low-visibility conditions.
Adding to the turmoil, the Trump administration has hit Tesla with unpredictable tariffs and slashed crucial environmental regulatory credits—another blow to the company’s already dwindling revenue sources.
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