Tesla reported a 12% drop in revenue for the year’s second quarter on Wednesday evening after CEO Elon Musk publicly feuded with President Donald Trump.
The latest earnings report shows Musk’s electric vehicle company made $22.5 billion in total revenue for the quarter, representing Tesla’s sharpest revenue decline in at least a decade. Its net income was $1.2 billion, down 16% from last year.
Tesla’s revenue results fell slightly below Wall Street’s estimates of $22.64 billion.
In recent months, Tesla’s sales have suffered due to Musk’s previous support of Trump. The billionaire is no longer associated with the president; however, he is also not in charge of the Department of Government Efficiency, which drew the ire of Democratic lawmakers and anti-Musk protesters over the federal initiative’s cost-cutting measures to the executive branch.
Musk’s public breakup with Trump can be attributed to the tech mogul’s opposition to the One Big Beautiful Bill Act. The Tesla CEO took issue with the legislation because he wanted to keep green energy tax credits intact, claiming their repeal would threaten the nation’s energy independence and grid reliability. Trump suggested the effect on his business influenced Musk’s opposition.
Congress passed the bill and Trump signed it into law earlier this month.
On the earnings call, Musk warned Tesla “could have a few rough quarters” ahead as the incentives disappear. “I’m not saying we will, but we could, you know, Q4, Q1, maybe Q2,” he said.
Tesla’s stock was down nearly 5% by the end of the call.
Tesla could also face more challenges in its business after Trump recently signed resolutions that eliminated California’s vehicle emissions standards and clean air goals. Tesla has endorsed California’s climate policies, including the Low Carbon Fuel Standard.
Also on Wednesday, the electric vehicle automaker announced it had started production on a cheaper model. The company did not disclose the price, but it will likely be below the Tesla Model 3’s starting price of $42,490. That model is currently the cheapest model available for purchase.
TESLA SHARES ON THE DECLINE AMID MUSK’S LAUNCH OF A NEW PARTY
Tesla also plans to begin full-scale production in 2026 on its all-electric “Semi” truck model and the fully autonomous Cybercab robotaxi. Both projects have faced delays.
Other automakers are also facing financial losses as Trump’s 25% tariffs on foreign-made vehicles and certain auto parts remain in effect. The Big Three automakers were particularly affected by the tariffs. General Motors and Stellantis reported their second-quarter earnings this week, and Ford is scheduled to report its latest earnings on July 30.
