Tesla reports plummeting profits

The company may soon face more problems with the expiration of federal electric vehicle tax credits

A Tesla electronic vehicle charing station
Musk's company reported a 16% decline in automotive revenue
(Image credit: George Walker IV / AP)

What happened

Electric vehicle maker Tesla reported Wednesday that its second-quarter revenue fell 12% and profits plunged 16% following a 13.5% drop in car deliveries.

Who said what

"We probably could have a few rough quarters," CEO Elon Musk warned investors. He said President Donald Trump's tariffs had cost the company $300 million over three months.

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Tesla has "been ceding market share to companies with more affordable EVs," said CNBC. Now the company has clearly "lost confidence in vehicle delivery growth for 2025," Electrek said.

What next?

Musk plans to "greatly expand" Tesla's robotaxi service by the end of the year to boost the company's finances. But there are "more headwinds" coming in the third quarter, said The Wall Street Journal, when the $7,500 EV consumer tax credit evaporates along with "many of the valuable carbon credits paid by other car manufacturers."

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Jessica Hullinger

Jessica Hullinger is a writer and former deputy editor of The Week Digital. Originally from the American Midwest, she completed a degree in journalism at Indiana University Bloomington before relocating to New York City, where she pursued a career in media. After joining The Week as an intern in 2010, she served as the title’s audience development manager, senior editor and deputy editor, as well as a regular guest on “The Week Unwrapped” podcast. Her writing has featured in other publications including Popular Science, Fast Company, Fortune, and Self magazine, and she loves covering science and climate-related issues.