Tesla posts biggest quarterly decline in over a decade, says it'll still be world's “most valuable company"

Tesla has announced its biggest revenue decline since 2014 and its third consecutive quarter of falling profits, with the company expecting growth to come from its robotaxi and artificial intelligence (AI) businesses instead of from selling cars alone. 

The electric vehicle (EV) company reported a $US1.2 billion (A$1.8bn) profit for the second quarter (April-June) of 2025, down from $US1.4 billion over the same period in 2024. 

It’ll announce sales volumes for the first half of 2025 in a separate call, yet reports from Europe show Tesla has been relegated to second place there by a 78 per cent increase in sales of Volkswagen EVs. 

In Australia, Tesla has recovered somewhat after a slump in 2024, the brand comfortably at the top of the sales charts despite its first-half 2025 results of 14,146 sales down compared to 23,116 over the first half of 2024. 

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Tesla also announced a 12 per cent fall in revenue between April-June 2025 to US$22.5 billion (A$34bn), down from $25.50 billion over the same period in 2024. 

This followed its first quarter (January-March) 2025 including a 66 per cent year-on-year fall in operating income, with the company last posting an increase in quarterly profit in the third quarter (June-August) of 2024.

It’s not the only US car company under pressure, with General Motors (GM) posting a $1.1 billion loss in the second quarter, while Stellantis – which includes Jeep, Ram Trucks and Chrysler among its brands – lost €2.3 billion (A$4.1 billion) between January and June.

Ford is scheduled to announce its second-quarter earnings on July 30, 2025. 

Tesla CEO Elon Musk said the company is bracing for “a rough couple of quarters” ahead as the removal of EV sales incentives and changes to emissions laws in the United States (US) come into effect.

US President Donald Trump recently signed a bill ending incentives of up to US$7500 for EV buyers from September this year. 

The same bill scrapped fines for automakers who exceed emissions laws – a world-leading program in place since 1975 – ending a billion-dollar revenue stream for Tesla, which was able to sell credits to other manufacturers to enable them to comply. 

Regulatory credits made up 38.6 per cent of Tesla’s net income in 2024, with Tesla chief financial officer Vaibhav Taneja saying “We are in an unpredictable environment” during the earnings call. 

Mr Taneja also confirmed a long-awaited cheaper Tesla had gone into early production in June 2025, with greater volumes coming with a ramp-up later this year for US showrooms. 

The cheaper model, which Mr Musk said was “just a Model Y” could potentially have a sub-$50k price point in Australia, but has not yet been revealed or confirmed for a local launch. 

Despite the results, Mr Musk said the company’s pivot to its robotaxi operations and artificial intelligence (AI) will make Tesla “the most valuable company in the world by far”. 

The company launched its robotaxi service, using its new autonomous Cybercab, in a pilot program in Phoenix, Arizona with hopes to expand to other areas including San Franciscos as soon as possible. 

It’s also working on AI as part of its autonomous vehicle development, with the Grok AI assistant recently added to software of new Teslas sold in the US. 

“I do think if Tesla continues to execute well with big autonomy and humanoid robot autonomy, it will be the most valuable company in the world,” Mr Musk said on the call. 

“So, a lot of execution between here and there. It doesn’t just happen. But provided we execute very well, I think Tesla has a shot at being the most valuable company in the world.”

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