Tesla Q2 Earnings Show Sales Slump, Robotaxi Expansion

Tesla reported second-quarter 2025 earnings with adjusted earnings per share of 40 cents and revenue of $22.5 billion, results that were roughly in line with or slightly below various Wall Street expectations. Vehicle deliveries declined 13% year-over-year to 384,112 units, contributing to a 16% drop in automotive revenue to $16.7 billion, while energy generation and storage revenue fell 7% to $2.8 billion with deployments also down. Despite these declines, gross margins exceeded expectations at 17.2%, and Tesla's services and other business segment, including its Supercharging network and AI-assisted support, grew 17%. The company highlighted progress on its Full Self-Driving (FSD) and robotaxi services, with planned expansions to cover half the U.S. population by year-end, although regulatory delays in Europe and China persist. Tesla also announced the development of a more affordable vehicle with Cybercab production expected in 2026, while free cash flow significantly decreased to $146 million. Analysts remain cautiously optimistic, with an Overweight rating and a $355 price target pending updates.