Tesla Posts Record Revenue but a Steep Profit Miss, and Shares Fall 15%

Tesla (TSLA) fell 14.5% on Thursday to close at $319.69, erasing about $140 billion in market value, a day after the automaker paired record quarterly revenue with a sharp miss on profit. Volume ran nearly three times the stock’s 20-day average. Sales set a record. Earnings did not follow.

Regulatory-credit income collapsed

Tesla reported second-quarter results after Wednesday’s close. Revenue reached $28.24 billion, up 26% from a year earlier and a company record, ahead of the $26.4 billion analysts had modeled. Adjusted earnings came in at $0.33 a share, well short of the $0.51 to $0.53 Wall Street expected. Operating income fell 57% to $398 million, and operating margin narrowed to 1.4% from 4.1% a year earlier.

Much of the squeeze traced to regulatory credits, the pollution-offset payments Tesla collects from other automakers. That income dropped to $146 million from $439 million a year earlier, a 67% decline, as the expiration of the federal EV tax credit eroded the market for the credits. Those payments cost Tesla almost nothing to earn. The drop hits profit directly.

Record deliveries, thinner economics

The company delivered a record 480,126 vehicles, produced 451,758, and deployed 13.5 gigawatt-hours of energy storage. The volume did not translate into profit. Capital spending rose more than 140% from a year earlier to $5.8 billion, and free cash flow turned negative at $1.09 billion, Tesla’s first cash-burning quarter since early 2024. Reported net income still came in positive at $1.11 billion, though about $1 billion of that reflected a one-time gain on the value of Tesla’s stake in SpaceX rather than the car business.

On the earnings call, executives offered few new milestones for the planned robotaxi service and the Optimus humanoid robot, the projects the heavy spending is meant to fund. Both remain pre-revenue.

The close marked a fresh 90-day low

Thursday’s drop extended a weak stretch. The slide has been building. The stock is down 16% over the past 30 days, and its $319.69 close sits 28% below the 90-day high of $445.27. It also finished under the prior 90-day low of $343.25, a fresh low for that window. The one-day decline ranks among the steepest single sessions in the stock’s recent history.

The quarter reframed a debate that has run all year: how much the company is worth as a carmaker today versus as a bet on autonomy and robotics later. Record deliveries answered the first question. The profit line, propped up by an investment gain and dragged down by vanishing credits, sharpened the second.

What to watch

Tesla has not announced a date for third-quarter results. That comes later. Its next hard data point is the quarterly delivery figure, which the company typically releases in the first days of October and which will show whether record volumes hold as the federal tax credit that supported U.S. demand winds down. Management pointed to self-driving capability for the Tesla Semi arriving around the end of this year or early next, and to continued work on the Cybercab. Whether regulatory-credit income stabilizes will shape the margin math in coming quarters.

This is a general-market summary for information only — not investment advice, and not a recommendation regarding any security.