Tesla has released its Q2 2025 earnings report, meeting revenue expectations but showing continued pressure on profitability as the company pivots towards autonomous driving and energy storage.
Revenue for the quarter reached $22.5 billion, aligning with analysts’ forecasts of $22.1 to $22.9 billion, but marking a 12% year-over-year decline compared to $25 billion in Q2 2024.
Earnings and Profit Margins
Tesla reported a GAAP net income of $1.2 billion and a non-GAAP net income of $1.4 billion, translating to a diluted earnings per share (EPS) of $0.33 GAAP and $0.40 non-GAAP. These results were in line with the lower end of Wall Street expectations, which had projected EPS between $0.39 and $0.44.
The company’s operating margin fell to 4.1%, down sharply from 6.3% a year ago, reflecting a combination of price cuts, reduced regulatory credit revenue, and higher R&D spending on AI and autonomy.
Robotaxi and AI Expansion
The milestone of the quarter was the launch of Tesla’s first Robotaxi service in Austin, Texas, which was referred to in the report as “a seminal moment” in the company’s history. Using a camera-only architecture and neural networks trained on billions of real-world driving miles, Tesla believes its autonomous fleet will scale rapidly while improving safety and profitability.
“Our efforts to refine the Robotaxi offering in Austin are not location-specific and will allow us to scale to other
cities quickly with marginal investment,” Tesla said.
Energy and Infrastructure Growth
Tesla’s energy segment remains a bright spot, with the start of Megapack deployments from the new Shanghai Megafactory and strong demand for Powerwalls. Energy generation and storage revenue came in at $2.8 billion, down 7% year-over-year due to lower average selling prices but offset by higher gross profit.
Tesla’s global Supercharger network also expanded to 7,377 stations with over 70,000 connectors, marking an 18% increase from the previous year.
Cash Flow and Investments
Operating cash flow was $2.5 billion, while free cash flow came in at $146 million, down 89% year-over-year due to increased capital expenditures on autonomy and energy projects. Tesla ended the quarter with $36.8 billion in cash and investments, a slight decline from Q1.
Outlook
Looking ahead, Tesla reaffirmed plans for volume production of its affordable next-generation EV in late 2025 and Cybercab robotaxi and Semi production in 2026. The company emphasized that future profits will increasingly come from software, AI services, and fleet-based operations rather than hardware alone.
You can read Tesla’s full report below. Tesla (TSLA) shares have been relatively stable following the release of the report, down less than half a percent in after-hours trading.
