Tesla released its worst quarterly report in a decade, with revenue, profit, and sales all declining. Its affordable new car will go into mass production in the second half of the year.
Tesla's net profit in the first half of the year dropped by 30%! Elon Musk is eager to rescue the market and keeps making grand promises.
According to a report from CheDongXi on July 24th, just recently, Tesla released its financial report for the second quarter of 2025. Reuters pointed out that this is Tesla's most severe quarterly sales decline in more than a decade. Looking at the first half of this year, both Tesla's revenue and net profit declined.
Tesla's total revenue in the first half of 2025 was $41.8 billion (approximately RMB 299.5 billion), a year-on-year decline of 11% compared to $46.8 billion (approximately RMB 335.1 billion) in the same period last year. The revenue from the automotive business was $30.6 billion (approximately RMB 219.3 billion), a year-on-year decline of 18%.
Tesla's net profit in the first half of the year dropped by 30%. Its attributable net profit (non-GAAP) in the first half of the year was $2.327 billion (approximately RMB 16.7 billion), compared to $3.348 billion (approximately RMB 24 billion) in the same period last year. In addition, Tesla's free cash flow was only $100 million (approximately RMB 700 million).
Tesla's financial performance in the second quarter of 2025
It can be said that Tesla's financial performance in the first half of the year was a bit weak, which is also related to the decline in sales. Tesla produced a total of 772,900 new cars in the first half of the year, a year-on-year decline of 8%, and delivered 720,800 new cars, a year-on-year decline of 13.2%.
Tesla's automotive sales performance in the second quarter of 2025
In response, Elon Musk warned that Tesla is in an "unusual transition period." The company has lost the electric vehicle sales incentives in the United States and may face "several challenging quarters."
However, he also released a lot of good news to give the market some confidence. Tesla's more affordable models have started production at the US factory and will be mass-produced in the second half of the year.
Elon Musk even made a series of statements during a conference call: "FSD may be approved in the Netherlands, which is expected to change the sales situation in Europe", "FSD is about to undergo a major update", "Robotaxi will surpass its competitors in two weeks and serve half of the US population by the end of the year"...
As of press time, Tesla's after-hours stock price in the US market dropped by more than 4%, reaching $317 (approximately RMB 2,270) per share. In the current highly competitive new energy vehicle market, it remains to be seen whether Tesla can increase its sales again by leveraging its technological leadership.
Tesla's stock price
01. Both revenue and net profit decline, hinting that the affordable new car is in production
Judging from the second-quarter financial report, both Tesla's revenue and net profit declined. The total revenue was $22.5 billion (approximately RMB 161.1 billion), a year-on-year decrease of 12%. The attributable net profit (non-GAAP) was $1.393 billion (approximately RMB 10 billion), a year-on-year decline of 23%. The GAAP gross profit margin also decreased from 18.0% in the same period last year to 17.2%.
Looking at specific businesses, among Tesla's three business segments, the total automotive revenue and the revenue from energy production and storage both declined year-on-year in Q2.
Specifically, in terms of automotive sales, Tesla's automotive revenue decreased by 16.6% year-on-year, from $19.9 billion (approximately RMB 142.5 billion) in the second quarter of 2024 to $16.6 billion (approximately RMB 118.9 billion).
Tesla delivered a total of 384,100 vehicles in the second quarter of this year, a 14% decline compared to the second quarter of 2024.
Changes in Tesla's market share in different regions
The revenue from Tesla's "Services and Other" category increased from $2.61 billion (approximately RMB 18.7 billion) in the second quarter of 2024 to $3 billion (approximately RMB 21.5 billion) in 2025, a growth rate of 17%.
Tesla's V4 charging cabinet
Nevertheless, Tesla is still trying to boost market confidence. The official said in the report that it launched a more affordable model for the first time in June and plans to mass-produce it in the second half of 2025.
The company said that it is also continuing to develop the Tesla Semi and Cybercab, which are expected to be mass-produced in 2026.
Tesla confirms that the more affordable models started production in June
It is worth noting that Tesla's cash reserve decreased by $200 million (approximately RMB 1.4 billion) in the second quarter to $36.8 billion (approximately RMB 263.5 billion), and its free cash flow (cash after deducting daily operating expenses and capital expenditures) was only $100 million (approximately RMB 700 million).
Some overseas analysts predict that Tesla's free cash flow may actually turn negative later this year, which may trigger a significant decline in the stock price.
02. Elon Musk keeps making grand promises, Robotaxi to serve half of Americans by the end of the year
Overall, Tesla's performance in the first half of the year declined compared to previous years, but Tesla also brought a lot of new positive news. During the earnings conference call, Tesla CEO Elon Musk responded to multiple topics including FSD, Robotaxi, and humanoid robots.
1. FSD may be approved in an important country! Reverse the situation in Europe
Elon Musk revealed an important piece of news during the meeting: Tesla is close to obtaining approval from the Dutch regulatory authorities for the supervised Full Self-Driving (FSD) function. Once the regulated full self-driving function is approved, Tesla's sales in Europe will increase significantly.
Demonstration diagram of Tesla's FSD
2. FSD to undergo major improvements, AI5 to be launched next year
The promotion of FSD obviously faces regulatory challenges, but Musk pointed out that Tesla will obtain these approvals. He hopes that European users can also enjoy the same services as American users. "This is really the biggest driver of demand," Musk said.
On the other hand, he also pointed out that Tesla is making major improvements to its FSD software, and the company may increase the number of model parameters by 10 times.
Tesla plans to launch AI5 next year. And it hopes to decide how to handle HW3 vehicles after completing the development of unsupervised FSD on AI4.
Accumulated driving mileage of Tesla's FSD
3. Robotaxi to surpass competitors in two weeks, cover half of the US population by the end of the year
Tesla introduced its Robotaxi service launched in Austin during the earnings conference call.
"So far, Robotaxi has been performing well in Austin," said Tesla CFO Vaibhav Taneja. "Customers really like the experience. It's super smooth, very safe, and overall a great experience."
Tesla's Robotaxi in operation (Source: Internet)
Next, Tesla will work hard to reduce costs, and the cost per mile of Robotaxi will be reduced to $0.3 - $0.4 (approximately RMB 2 - 3).
He added that the expansion in Austin has begun, and testing in some other cities has also started. In the next few months, the Robotaxi service will be expanded to the Bay Area, Arizona, and Florida.
Tesla CEO Elon Musk said that Robotaxi will expand to "far exceed the performance of its competitors" in the next two weeks.
It is worth noting that Musk even boldly claimed that "by the end of this year, Tesla will be able to provide Robotaxi service to half of the US population." "This is our goal, but it requires regulatory approval," Musk said.
Tesla officially said that the current regulatory approval will be the biggest obstacle. Even though Tesla is carefully expanding its Robotaxi service, it requires each Robotaxi to be supervised by a Tesla employee.
When asked when it will start making money, Musk said it may not happen until the end of next year.
4. The new version of the humanoid robot will be unveiled this year, with an annual production of 1 million units in 5 years
During the meeting, someone asked when Tesla's humanoid robot Optimus will increase its production scale and be sold to the public.
Tesla's Optimus
Musk said that the prototype of Optimus version 3 may be seen this year, and mass production will start next year. Considering the company's desire to produce millions of Optimus robots every year, Tesla will push forward these initiatives as soon as possible. Musk believes that it is difficult to predict what the humanoid robot will develop into in one or two years. It is feasible to achieve a monthly production of 100,000 Optimus robots within five years.
Musk said, "We don't always meet the deadlines, but we will get it done." He also reiterated that if Tesla executes well, it can become the most valuable company in the world.
5. Praise Tesla's restaurant as "quite remarkable", the supercomputer will be deployed on a large scale next year
Musk also mentioned the launch of Tesla's restaurant. "It's a very special restaurant," he said, and pointed out that the facility is a "beacon of hope." He joked that restaurants rarely make the news, but the newly launched restaurant is quite remarkable.
Tesla's restaurant
Tesla also mentioned the progress of Dojo (supercomputer). Dojo 2 is expected to be deployed on a large scale in 2026.
6. Respond to the decline in sales: It depends on multiple factors