Tesla reaffirms 2025 low-cost EV timeline, delivers in-line Q2 results – update

Updated 16:50ET with analyst reactions

Shares of Tesla (NASDAQ:TSLA) are straddling the flatline in postmarket trading as the company’s second quarter results were not as bad as Wall Street expected and avoided a second consecutive top- and bottom-line miss with profits in-line with expectations. Additionally, the company assured investors that plans for a lower cost vehicle “remain on track for the second half of 2025.”

The company is also continuing its production of the Tesla Semi and Cybercab, both slated for volume production in 2026.

As recently as Wednesday, Tesla (NASDAQ:TSLA) began discussions with Nevada officials to establish autonomous vehicle operations in the state as part of its plan to expand its robotaxi service.

For the second quarter, Tesla (NASDAQ:TSLA) earned an adjusted profit of $0.40 per share, down from $0.52 per share a year ago as higher operating expenses were only partially offset by a decline in restructuring charges and lower cost per vehicle. This matched the consensus estimates. Adjusted EBITDA was down 7% to $3.4B.

As a result of the decline in vehicle inventories, lower regulatory credit revenue, lower vehicle prices and a decline in energy generation and storage revenue, total revenue of $22.5B was down 12% from a year ago but was better than Wall Street’s $22.13B expectations.

Automotive gross margin narrowed 80 basis points to 17.2% but was also better than expectations of 16.5%.

On the company’s balance sheet, operating income was down 42% to $923M versus $1.23B estimates, capital expenditures increased by 5.2% to $2.39B versus $2.43B estimates, while free cash flow dropped as much as 89% to $146M, well below expectations of $760M.

Seeking Alpha analyst reactions:

Geneva Investor thinks Tesla’s (NASDAQ:TSLA) delivery miss was not surprising, given headwinds from high interest rates, politics, and tariffs, and is more worried about the energy segment, which showed a 17% year-over-year decline without insights from management for a reason for the steep erosion. But despite concerns about the auto business, the company remains a long-term story for the analyst.

“I see their AI investment as putting the company at a competitive advantage–something that was confirmed again this quarter with 67K H100 GPUs for AI training.”

Jonathan Weber, investing group leader for Cash Flow Club views Tesla results as “not quite as bad as feared, but that still show weak operational results.”

“Tesla remains profitable and has a solid balance sheet, thus there is no bankruptcy risk. But for a company that trades at more than $1 trillion, these results seem pretty weak.”