Tesla’s Stock Takes a Dive: Q2 Earnings Report Leads to 8% Drop
Tesla’s shares took a significant hit, plummeting over 8% on Thursday. This sharp decline followed the electric vehicle manufacturer’s Q2 earnings report, which not only fell short of Wall Street’s expectations but also highlighted the company’s deepening financial woes.
The company reported adjusted earnings of 40 cents per share, a disappointing dip from the anticipated 43 cents. Revenue also fell short, with the $22.5 billion reported failing to meet the expected $22.74 billion.
This marks Tesla’s second consecutive quarter of dwindling sales and profits. Auto revenue saw a 16% year-over-year drop, while overall revenue fell by 12%. The most alarming figure was perhaps the 43% plunge in operating income, leading to the company’s operating margin shrinking to a mere 4.1%.
During the earnings call, CEO Elon Musk cautioned investors that Tesla “probably could have a few rough quarters” in the future, pointing to tariff pressures and the impending expiration of federal EV tax credits.
The struggles faced by Tesla mirror the broader challenges plaguing the EV pioneer. These include:
- Increased competition from Chinese manufacturers
- Brand damage resulting from Musk’s political activities
- Production delays for its more affordable vehicle models
The stock has now plummeted over 22% year-to-date, making it the worst performer among tech megacaps in 2025.
Source: CNBC