Tesla reported mixed second-quarter results Wednesday, with total revenue declining 12% to $22.5 billion while the company achieved a significant milestone by launching its first robotaxi service in Austin, Texas.
The electric vehicle manufacturer posted GAAP net income of $1.2 billion, down 16% from the same period last year, with diluted earnings per share of $0.33 compared to $0.40 in Q2 2024. Operating income fell 42% year-over-year to $923 million, resulting in a 4.1% operating margin.
Robotaxi service marks strategic pivot
Tesla characterized Q2 2025 as "a seminal point in Tesla's history," marking the beginning of its transition from leading electric vehicle and renewable energy industries to becoming a leader in artificial intelligence, robotics and related services.
The company launched its robotaxi service in Austin in June with safety riders present. Tesla achieved what it called "the world's first autonomous delivery to a customer" with a new Model Y driving itself approximately 30 minutes from the factory to the owner's home, including highway travel.
"While the service is limited in initial scope, we believe our approach to autonomy – a camera-only architecture with neural networks trained on data from our global fleet of millions of vehicles – allows us to continually improve safety, rapidly scale the network and improve profitability," the company stated.
Vehicle deliveries and production decline
Tesla delivered 384,122 vehicles in Q2 2025, down 13% from 443,956 vehicles in the same quarter last year. Model 3/Y deliveries fell 12% to 373,728 units, while other model deliveries dropped 52% to 10,394 units.
Total vehicle production reached 410,244 units, flat compared to the prior year. Model 3/Y production increased 3% to 396,835 units, but other model production declined 45% to 13,409 units.
The company's global vehicle inventory increased to 24 days of supply, up from 18 days in Q2 2024.
Revenue breakdown shows mixed performance
Automotive revenue fell 16% year-over-year to $16.7 billion, impacted by declining vehicle deliveries, lower regulatory credit revenue, and reduced average selling prices due to product mix changes.
Regulatory credit revenue dropped to $439 million from $890 million in Q2 2024, representing a significant headwind for profitability.
Energy generation and storage revenue declined 7% to $2.8 billion, while services and other revenue grew 17% to $3.0 billion, partly driven by improved supercharging margins.
Energy business achieves record performance
Despite revenue declining slightly, Tesla's energy storage business achieved record trailing twelve-month deployments for the 12th consecutive quarter. The company deployed 9.6 GWh of energy storage in Q2 2025.
Energy generation and storage gross profit reached a record $846 million, with the business benefiting from the start of Megapack deployments from the Shanghai Megafactory.
"When paired with solar PV, Megapack is cost competitive with traditional fossil fuel generation assets and can be deployed 4x faster than traditional fossil fuel plants of the same capacity," Tesla reported.
Strong balance sheet amid uncertain environment
Tesla maintained a strong financial position with $36.8 billion in cash, cash equivalents and investments at quarter-end, down slightly from $37.0 billion in the previous quarter.
Operating cash flow totaled $2.5 billion, while free cash flow was $146 million after capital expenditures of $2.4 billion.
The company expanded its AI training capacity, adding 16,000 H200 GPUs at Gigafactory Texas, bringing total Cortex capacity to 67,000 H100 equivalents. Tesla plans further expansion to approximately 130,000 H100 equivalent GPUs by the end of September.
Product development and manufacturing updates
Tesla continued development of its more affordable vehicle model, completing first builds in June with volume production planned for the second half of 2025. The company also advanced development of the Tesla Semi and Cybercab, both scheduled for volume production in 2026.
The company produced its 8-millionth vehicle at Gigafactory Berlin-Brandenburg in June and opened the Tesla Diner in Los Angeles, combining charging, dining and entertainment services.
Challenges from trade and policy uncertainty
Tesla acknowledged headwinds from "shifting tariffs, unclear impacts from changes to fiscal policy and political sentiment" affecting the automotive and energy supply chains.
Despite these challenges, the company said it continues making "high-value investments in CapEx and R&D while ensuring a strong balance sheet."
Market expansion and safety achievements
Tesla expanded its geographic footprint, launching the Model Y in India and achieving record delivery volumes in South Korea, Malaysia, the Philippines and Singapore. The refreshed Model 3 earned 5-star safety ratings from both ANCAP and EuroNCAP testing organizations.
The company added 2,900 net new supercharging stalls during the quarter, growing the network 18% year-over-year to 7,377 stations with 70,228 connectors globally.
Tesla said it remains focused on "delivering affordable and compelling autonomy-capable models that maximize our global fleet of vehicles as our autonomy software continues to rapidly progress, growing the energy business and advancing our robotics efforts."
