Tesla profits pulled down by falling EV sales and regulatory credits

Tesla’s financial performance in the second quarter of 2025 was negatively impacted by a combination of falling electric vehicle (EV) sales, a lower average selling price, reduced revenue from regulatory credits, and declines in solar and energy storage revenue. Although the company’s services business, including its Supercharging network, grew by 17%, it was insufficient to offset the overall revenue decline. Tesla reported $21.45 billion in revenue, a 12% decrease year-over-year, but an improvement over the first quarter’s $19.3 billion. Net income dropped 16% to $1.17 billion, while operating income fell 42% to $923 million. Regulatory credits revenue halved to $439 million compared to the previous year, reflecting fewer sales and reduced credit income. Tesla delivered 384,122 vehicles in Q2 2025, marking a 13.5% decline from the same period in 2024 but an increase from the first quarter’s 337,000 deliveries