Tesla's performance is poor. Elon Musk has stated that he won't be ousted by shareholders unless he really goes crazy.
Yesterday, Tesla released its financial report for the second quarter of 2025. Although Tesla's stock price dropped by nearly 5% after the release of the financial report that day, and the outside world was generally pessimistic about its performance, overall, the performance in the second quarter was not that bad. Especially in terms of future layout and expectations, the results are gradually emerging.
Looking at several major figures, the total revenue in the second quarter was $22.5 billion, a year-on-year decline of 12%, the largest quarterly decline in at least a decade. However, this figure is not very different from the market expectation of $22.8 billion.
The net profit in the second quarter was $1.172 billion, slightly higher than the market expectation. The gross profit margin of car sales also increased by 2.5% quarter-on-quarter to 15% due to the price increase of new cars after their launch and the improvement of the scale effect. In fact, the R & D expenses and capital investment were still increasing. Among them, the R & D expenses were $1.59 billion, and the capital investment was $2.4 billion, both significantly higher than before.
The global delivery volume was 384,000 vehicles, a year-on-year decrease of 13.5%. The sales volume of the main models, Model 3/Y, plummeted by more than 70% in many European countries.
From the perspective of business segments, the revenue of the most core automotive business was $16.7 billion, a year-on-year decrease of 16%; the energy storage revenue was $2.789 billion, a year-on-year decrease of 7%; and the revenue from services and others was $3.05 billion, a year-on-year increase of 17%.
From the perspective of business progress, the mass production of the affordable Model 2.5 has been postponed; the Robotaxi business will have a substantial impact on the finances around the end of next year; Tesla plans to expand the parameter scale of the FSD model by about 10 times, continue to release the supervised version of FSD more widely in China, and is ready to launch the supervised version of FSD in the European market.
In terms of hardware, the AI 5 chip is expected to be mass-produced by the end of next year, with great potential; Tesla is planning to integrate the Dojo 3 and AI 6 inference chips, that is, a set of chips can be used in cars and Optimus, or multiple combinations can be applied in data centers.
In terms of robots, Musk believes that Optimus 3 will become the greatest product of all time. The company will launch a prototype within three months and start production early next year. In the next five years, it will produce 100,000 Optimus robots per month.
In addition, the Texas Super Factory has newly deployed 16,000 NVIDIA H200 GPUs, expanding the AI training computing power, and the total number of H100 GPUs equipped in the supercomputing cluster Cortex in Texas has reached 67,000.
When answering investors' questions at the earnings conference, Musk said that he was worried about his control over Tesla. At present, it is easy for him to be ousted by radical shareholders, and he hopes that this issue can be resolved at the upcoming general meeting of shareholders.
"I think my control over Tesla should be sufficient to ensure that it develops in a good direction, but not so much that I can't be removed if I go crazy."
01
The basic business of car sales and energy storage remains under pressure
The new Model Y launched this year has had a significant positive impact on profit margins and sales volume, greatly improving the quarter-on-quarter data this quarter. Musk mentioned that the number of test drives in North America increased by 20% quarter-on-quarter. New delivery records were set in South Korea, Malaysia, the Philippines, and Singapore. Deliveries of the Model Y in India will start in Q3. The production ramp-up of the new Model Y is an important milestone this quarter.
In addition, in the third quarter of this year, Tesla will first launch the Model Y L in China. This model is a large six-seater luxury all-electric SUV, positioned between the Model Y and the Model X. Industry insiders expect the price to be around 400,000 yuan. The model will be launched and delivered this autumn.
In the second quarter, Tesla's sales volume in the Chinese market was 128,800 vehicles, and the cumulative sales volume in the first half of the year was 263,400 vehicles, a 5.4% decline compared with the same period last year. The market share has dropped from its peak of 15% in 2020 to the current 7.6%. The pressure is obvious. Deploying long-wheelbase models may be a key move for Tesla in the Chinese market in the second half of this year.
At the earnings conference, Tesla mainly mentioned that the US bills, the revision of regulatory credit and carbon emission regulations, and even tariffs will all have an impact on Tesla's basic business of car sales, which also means that the basic business of Tesla's car sales remains under pressure.
The US $7,500 IRA subsidy will expire on September 30. Although it is expected that the US demand may be released in advance to some extent in the third quarter, Tesla CFO Taneja clearly stated that in the fourth quarter, the sales volume in the US will be hit, and the downward trend of existing models is inevitable. Therefore, the mass production and launch progress of the affordable Model 2.5, which everyone was looking forward to before, will have a great impact on Tesla's performance in the fourth quarter and the whole year.
Tesla mentioned that due to the priority of ensuring deliveries before the expiration of the US IRA subsidy, the mass production time of the Model 2.5 is expected to be postponed again to the fourth quarter. In fact, there have been repeated reports this year that the production of this model has been cancelled. At this earnings conference, Tesla confirmed that the model will not be cancelled, and Musk mentioned that in fact, the production of this model started in the first half of this year, and the production ramp-up will take place next quarter.
Previously, the market reported that the Model 2.5 would be launched in the US first, followed by Europe, and it would not be launched in China until the end of the year. Coupled with the further delay in delivery, it may be difficult to achieve large-scale global deliveries this year, and it may also lead to a further downward adjustment of the annual car sales forecast.
In terms of the gross profit margin of car sales, the adjustment of emission regulations will cause the regulatory credits to continue to decline in the following quarters. In addition, Trump's new policy will impose a 15%-50% tariff on imported goods. Taneja mentioned that this will increase Tesla's supply chain costs by about $300 million, most of which will be reflected in the automotive business.
In addition, regarding the Cybercab, as an affordable and safe taxi, it will not emphasize performance but will be more efficient and lightweight, aiming to provide a smooth riding experience. Production is expected to start next year.
The energy storage business is affected almost the same as the car sales business. Although Tesla expects the energy storage demand from AI and data centers to increase, because the zero-carbon incentive policy will end ahead of schedule at the end of the year, the short-term residential energy storage is also affected by the IRA, which in turn affects Tesla's energy storage business.
According to Tesla's plan, key links such as lithium refining and cathode production will be transferred to the US for production in 2025, and the production of lithium iron phosphate (LFP) batteries in the US will start before the end of 2025. However, the impact of the increased tariffs this year will still affect Tesla's energy storage business, which will also be evident later this year.
Musk also admitted, "Due to the negative impact of the bills and tariffs, our business is facing short-term challenges... We may have a few difficult quarters."
02
Robotaxi is progressing as planned and is expected to cover half of the US population by the end of the year
Although Tesla's main business is under great pressure, its other businesses, which are regarded as its long - term goals by the outside world, are booming. Especially in the second quarter of this year, good progress has been made.
Among them, Robotaxi was officially launched in Texas, the US, in June. The first batch of 20 unmodified Model Ys have been put into small - scale trial operation, with a charge of $4.2 per ride. So far, the Robotaxi fleet has traveled 7,000 miles. Tesla said that the experience was great, and customers really liked it. So far, there have been no obvious major safety accidents.
According to Tesla's previous plan, it is expected to promote Robotaxi to multiple US cities, such as San Francisco, Los Angeles, and San Antonio, by the end of the year. The number of Robotaxis will reach 1,000 within a few months. In terms of business progress, it is expected to have a significant impact on the financial statements in the second half of next year.
At this earnings conference, Tesla mentioned that the operating area of the Robotaxi business has been expanded, and it is expected to expand further in the next few weeks, with a coverage far exceeding that of existing competitors.
Currently, Tesla is actively promoting the regulatory approval process in areas such as the San Francisco Bay Area, Nevada, Arizona, and Florida. Once these approvals are obtained, Tesla will gradually launch in most parts of the US. By the end of this year, Tesla's Robotaxi service will be able to cover more than half of the US population.
In terms of business progress expectations, it remains the same as previously mentioned, still expected to have a substantial impact on finances around the end of next year. However, Tesla also mentioned that before the Robotaxi business reaches a certain scale, Tesla will use the company's assets for the transition. Once a certain revenue scale is reached, external funds can be obtained through simpler financing methods, such as debt financing.
As for the issue of personal vehicles joining the Robotaxi fleet, which has always attracted much attention, Tesla said that it is still working hard to expand the scale. This dream will definitely come true, but it can't be rushed and may still take until some time next year. Moreover, Tesla will set some standards to ensure that personal vehicles are eligible to join the fleet.
03
Tesla expects breakthroughs for FSD in the Chinese and European markets
Although the FSD business has entered the Chinese market this year, due to many regulatory restrictions and requirements, its performance in the Chinese market is not outstanding. Tesla will continue to prepare for the release of the supervised version of FSD in the Chinese market and is currently waiting for approval from regulatory authorities.
Just today, Musk reposted a relevant video on Dongchedi comparing various assisted - driving systems in China. The passing rate of FSD ranked first among all tested models, highlighting Tesla's excellent achievements in China.
At the same time, Tesla is ready to launch the supervised version of FSD in the European market and is also waiting for approval from relevant European regulatory authorities. Musk is confident that approval can be obtained as early as the end of this quarter or at the latest by the end of this year. Once FSD makes breakthroughs in Europe and China, sales will be significantly improved.
In the second quarter, Tesla achieved autonomous vehicle delivery. A Model Y left the factory on its own using FSD, crossed the urban area and the highway in 30 minutes, and was successfully delivered to the user. This kind of autonomous delivery will become the norm in the future. Tesla plans to achieve autonomous vehicle delivery in the Bay Area and Austin by the end of this year.
Currently, Tesla's FSD is still based on the V13 software version and HW4.0 hardware. The market is still very much looking forward to a major update of Tesla's next - generation intelligent driving version, which will also be another major leap in the intelligent driving field. At this earnings conference, Tesla specifically mentioned that FSD has been significantly improved, and the number of model parameters will increase by about 10 times.
Musk revealed that since V12, the optional installation rate of FSD has been about 25%, partly because of the price cut. About 50% of Tesla owners with FSD have never tried it. Tesla plans to strengthen user education and encourage more people to try FSD.
It is worth mentioning that the mass - produced Model 2.5, which the industry is concerned about, will also be equipped with FSD.
In terms of supporting hardware, Tesla hopes to decide what to do with HW3 after completing the development of unsupervised FSD for AI4. The current strategic focus is still on unsupervised FSD. This also means that there will not be significant changes in hardware in the short term.
The more advanced AI5 is planned to be launched next year, and mass production will be in late 2026 or early 2027. Its performance is very powerful, far exceeding the export restriction requirements, so it may be difficult to export to countries such as China.
04
Optimus 3 is about to be launched, aiming for 1 million units in five years
Just this week, Tesla's first restaurant opened, and Optimus, as a restaurant waiter, became one of the biggest highlights of the restaurant. However, they are not the final mass - produced form of Optimus. At the earnings conference, Tesla said that it is still re - planning tools and making prototypes. Currently, it is in the stage of Optimus version 2 and 2.5, and plans to complete the final prototype of Optimus 3 by the end of this year.
Musk said that the design of Optimus 3 has made a huge leap, is basically completed, has no major defects, and is very refined. It is completely designed by Tesla independently, and every component, from motors to power electronics, sensors, and mechanical parts, is designed in - house.
Tesla applies the AI inference principle used in training the vehicle's FSD to train Optimus. Previously, Musk also mentioned that Optimus 3 will integrate the Grok voice assistant to achieve natural voice interaction using a large - scale AI model.
Musk once mentioned that the cost of Optimus 3 can be controlled below $20,000, and the mass - produced retail