Musk rarely laments his difficult situation. As he can't sell enough electric cars, he pins his hopes on driverless taxis.

During the analyst conference call after the release of the financial report, Elon Musk said "it's tough" nine times. This is the first time for the proud world's richest man.

When things were going smoothly, he boasted about selling 20 million vehicles a year; now, when the situation is gloomy, he talks a lot about self-driving cars and robots. Under the continuous and significant decline in performance, even the world's richest man, Elon Musk, has to temporarily put aside his pride and continuously sigh about the "tough" situation.

Another Disappointing Financial Report

Tesla announced its second-quarter results yesterday, which was no surprise. Now, what the market is concerned about is not whether Tesla's performance will stop declining and rebound, but how severe the decline will be.

So, how bad is Tesla's financial report? In the second quarter, it achieved revenue of $22.5 billion, a year-on-year decrease of 12%, the largest decline in a decade. Among them, the revenue of the core automotive business decreased by 16%, and the energy business decreased by 7%. In that quarter, Tesla's gross profit was $3.88 billion, a year-on-year decline of 15.3%. Another indicator that the outside world is concerned about is that in that quarter, Tesla's free cash flow was only $146 million, far lower than the market's expected $760 million.

The reasons for Tesla's revenue decline include a decrease in vehicle delivery volume, a decline in regulatory credit revenue, and a reduction in the average selling price. In addition, the revenue of the energy generation and energy storage business also decreased. However, business segments including the Supercharger network have shown some growth.

Judging from the financial report, there is no sign of improvement in Tesla's downward trend, and several major core performance indicators are even more worrying. Affected by this disappointing financial report, Tesla's stock price tumbled 4.5% after hours yesterday and plunged 8.2% today, and its market value fell below $1 trillion again. Obviously, investors have expressed concerns about this financial report and Tesla's prospects.

Tesla Can't Sell Cars Anymore

Tesla's biggest crisis is that its cars can't be sold. This was the case in the first quarter, and it's still the same in the second quarter. Tesla's delivery volume in the second quarter decreased by 13.5%, dropping from 443,000 vehicles in the same period last year to 384,000 vehicles, and the decline was even greater than that in the first quarter.

In the first half of this year, Tesla delivered a total of 720,000 vehicles, a year-on-year decline of 13.24%. It seems that Tesla has not been able to stop the significant decline in sales. At this rate, Tesla's total delivery volume this year may be difficult to exceed 1.5 million vehicles, far lower than last year's figure of 1.79 million vehicles, a decline for two consecutive years.

This market situation may be beyond what Elon Musk imagined. Just three years ago, Musk was still boasting that by 2030, Tesla would achieve annual sales of more than 20 million vehicles, equivalent to the combined sales of Toyota and Volkswagen. However, Tesla's sales growth stalled last year, and it's even more difficult to stop the downward trend this year.

Just half a year ago, Musk was still boasting that the production of the US factory would double within two years, reaching 2 million vehicles. But this production capacity target has lost its meaning. Because Tesla's global annual sales don't even reach this figure, not to mention the factories in Shanghai and Berlin.

Tesla is also facing the problem of overcapacity. The construction of the Gigafactory project in Nuevo León, Mexico, has completely stopped. The local government has invested $150 million in infrastructure construction, hoping that the Tesla factory would bring $15 billion in investment and thousands of job opportunities, but now all these have become a bubble.

The ideal is full, but the reality is cruel. Now, Tesla is facing a sales crisis in the world's three major markets. This may be unacceptable to the proud Elon Musk: his Tesla really can't be sold anymore.

In the first half of this year, Tesla's sales in the US decreased by 13%. In California, the largest electric vehicle market in the US, Tesla's sales in the second quarter decreased by 21%, a decline for the seventh consecutive quarter, and the decline is getting bigger and bigger. The situation in the European market is even worse. In the entire first half of the year, Tesla only sold 109,000 vehicles, a year-on-year decline of 33%.

Data from the China Passenger Car Association shows that in the second quarter of this year, Tesla's total sales in China were 129,000 vehicles, a year-on-year decrease of 12%; the total sales in the first half of the year were 364,000 vehicles, a year-on-year decline of 15%. It's worth mentioning that China already accounts for more than half of Tesla's sales and production capacity.

Someone has to take the blame for such dismal sales. In the past month, the executives in charge of the US and European markets at Tesla have successively left their positions, which means that under the pressure of declining sales and strategic adjustment, Elon Musk is carrying out a major restructuring of the management.

Among them are Omead Afshar, the senior vice president of sales and manufacturing operations in North America and Europe; Troy Jones, the vice president in charge of North American sales, service, and delivery; Jenna Ferrua, the president of human resources in the North American market; and Milan Kovac, the head of the autopilot and robotics department. Many of them are close confidants who have followed Elon Musk for more than a decade. After their departure, Elon Musk has now personally taken over the sales responsibilities in the US and Europe.

The Real Reason for the Sharp Decline in Sales

Perhaps what Elon Musk is reluctant to admit is that he himself is the direct person responsible for Tesla's significant decline in sales. In the past year or so, his many controversial political words and deeds and his close ties with the Trump administration have seriously damaged Tesla's brand image in the US and European markets, triggering extreme disgust, boycotts, protests, and even destruction from Tesla's original target customers.

Even though Musk has withdrawn from the Trump administration, publicly turned against Trump last month, and plans to establish a new political party, this will not effectively improve his image in the hearts of Tesla's main consumer group - liberal people.

While ruining its brand and users in the European and American markets, Tesla has encountered fierce competition in the Chinese market. In addition to the original BYD, Geely, Huawei's automotive partners, and new forces such as NIO, XPeng, and Li Auto, new players like Xiaomi, whose product positioning "targets Tesla," have emerged in the market, directly eroding Tesla's sales.

The newly released Xiaomi YU7 SUV has a similar product positioning to Tesla's Model Y, with a longer driving range but a lower price. It has received more than 200,000 orders just after its launch. There should be many potential owners who originally intended to buy the Model Y.

To make matters worse, as the Trump administration completely withdraws the electric vehicle incentive policies, starting from the fourth quarter, it will completely cancel the $7,500 electric vehicle purchase tax credit subsidy, as well as the carbon credit trading system that has brought Tesla pure profits in the billions of dollars. Tesla's sales and revenue in the US market will be hit even harder in the future.

Elon Musk sighed in the conference call, "We're in a strange transition period, and the US will lose a lot of incentives. We may have a few tough quarters. We're not saying it will definitely happen, but there is such a possibility."

Throughout the conference call, he said "tough" nine times. This is the first time for the proud world's richest man.

For Tesla, the most practical measure to boost sales at present is to lower prices or launch affordable models. Investors have always been looking forward to Tesla launching an affordable model, but last year, Elon Musk cancelled the legendary "Model 2" product line.

It's worth noting that Elon Musk said at the analyst meeting that the affordable car Tesla is about to launch is "a Model Y." Perhaps this means that Tesla will launch a revised Model Y with a lower price next. Although Tesla China recently promoted a "6-seater Model Y," it is positioned in the mid - to high - end market, not the affordable version that the outside world expected.

Needs New Stories to Support the Market Value

Since the leading electric vehicle company can't sell its cars, what can support its price - to - earnings ratio of up to 173 times and a market value of $1 trillion? It relies on the dream of self - driving cars and robots.

Just like in the previous quarter, Elon Musk talked more about self - driving cars and robots at the financial report meeting, hoping that these two cutting - edge technology businesses can become new sources of revenue for Tesla in the future, and that Tesla can transform from an electric vehicle giant into an artificial intelligence giant.

In the past decade, Elon Musk has been constantly describing his beautiful vision: Tesla owners' cars can go out to pick up passengers and charge on their own, bringing them revenue. Although Musk always said it would be realized soon, this dream only really started to come true last month.

Last month, Tesla launched a small fleet of robotaxis near its headquarters in Austin, Texas. The ride - sharing application is currently limited to downtown Austin and the South Congress neighborhood, only available to invited users, and there are only 10 vehicles for now.

It seems that Elon Musk is very satisfied with the test of Tesla's self - driving cars. Last week, he posted a picture on his X platform, and the service area of Tesla's self - driving cars in downtown Austin looks like the shape of a "ding - ding." Musk proudly announced that the fare will be raised from the previous $4.20 to $6.90 per trip.

It needs to be explained that these are two numbers that Elon Musk likes very much. April 20th is the US marijuana day, and it was also the price at which Musk joked on Twitter about taking Tesla private. The richest man still can't get rid of his old bad taste.

Self - Driving Cars Are a Big Gamble

However, judging from the specific operation of self - driving cars in Austin, there is still an obvious gap between Tesla's self - driving cars and Waymo's. There are still safety monitors in the cars, and there have been multiple potential accident risks, which were only avoided because of the intervention of the safety officers.

Just last week, a Tesla robotaxi ignored the traffic lights and tried to cross the railway. The FSD system seemed not to recognize the approaching train not far away. If it weren't for the intervention of the safety officer, this could have become a tragic traffic accident. This incident shows that Tesla's FSD is still far from being mature enough to operate without human safety officer intervention like Waymo.

Elias Martinez, a technical tracking expert in the Tesla FSD community, believes that Elon Musk is gambling on self - driving cars. Because the data he obtained shows that the latest version of Tesla's FSD (13.2.9) has a serious disengagement every 340 miles (about 547 kilometers) on urban roads and highways. What Musk said, "We can hardly find disengagement situations," is nonsense.

Martinez believes that the FSD in the Austin taxis also has similar problems, such as taking the wrong lane. But Tesla has not improved the underlying technology. Instead, it has spared no expense to meet Musk's schedule of starting operations in June. This is obviously because Musk needs to tell new stories to support Tesla's stock price and make investors forget the negative impact of the significant decline in electric vehicle sales.

Tesla refuses to disclose the safety records of its robotaxis, claiming that it is a trade secret. Therefore, the outside world doesn't know how many disengagements have occurred during the operation in downtown Austin. But on the prediction website Polymarket, speculators believe that the probability of Tesla launching fully autonomous robotaxi services anywhere in the country in the remaining time of this year is only 42%, lower than 86% a month ago.

Now, Tesla needs the story of self - driving cars more than ever. Elon Musk announced in the analyst conference call that Tesla plans to expand its robotaxi service to new markets, including multiple cities in Florida, Nevada, Arizona, and California.

Although Musk reiterated that Tesla is "extremely cautious" when launching technology, he still couldn't help making exaggerated promises about the future. He claimed that by the end of this year, 50% of the US population will be able to use Tesla's robotaxi service.

However, Tesla has not yet obtained a license to operate self - driving cars in the most important state of California. Moreover, the California Department of Motor Vehicles (DMV) is suing Tesla, accusing Tesla of false and misleading claims in the naming and marketing of Autopilot and FSD, and