Tesla Faces Worst Revenue Drop in a Decade

Tesla reported a 12% year-on-year revenue decline to $22.5 billion and a 16% drop in net income for Q2 2025, marking its steepest quarterly sales drop in over a decade. The company's stock fell over 9% after the report and is down about 25% for the year, reflecting mounting investor concerns. Key headwinds include the expiration of the $7,500 federal EV tax credit, a reduction in regulatory credit sales, and intensified competition. CEO Elon Musk acknowledged the likelihood of 'a few rough quarters' and highlighted a strategic shift toward autonomous vehicles and robotics, including the Optimus humanoid robot. However, analysts and investors are skeptical about how soon these segments will contribute to revenue as Tesla's core EV business continues to struggle. The company's brand has also been hit by Musk's political activities, leading to protests and declining favor among core consumer groups.