Investors in Tesla can’t seem to catch a break. Yesterday, Elon Musk’s electric vehicle company reported its Q2 2025 results—and they weren’t good. Today, the stock (Nasdaq: TSLA) is down significantly because of it. Here’s what you need to know about TSLA’s latest movement.
TSLA shares hit in early trading
As of the time of this writing, TSLA shares are currently down over 6%, or $20 per share, to $312.56 in premarket trading. That drop comes after the company reported its second-quarter results for its fiscal 2025 yesterday.
The company reported that it produced 410,244 vehicles during the quarter, over 396,000 of which were its popular models 3 and Y. During the same period, Tesla delivered 384,122 vehicles, its models 3 and Y accounting for over 373,000 of those deliveries.
But what seems to have concerned investors the most about the company’s Q2 results is its revenue number.
For the quarter, Tesla reported revenue of $22.5 billion. That was a 12% decline from the $25.5 billion that the company posted in the same quarter a year earlier. It was also worse than the $22.74 billion in revenue that many analysts were expecting.
Even worse was that this revenue decline was the second quarterly revenue drop in a row, and it came after Tesla launched refreshed versions of its popular Model Y SUV.
3 factors weighing Tesla down
Tesla is facing several problems, which are both impacting its revenue and making investors nervous for the future.
The main problem is that Tesla’s revenues are declining. This decline can be attributed to multiple factors, the first being Musk himself.
Ever since CEO Elon Musk leapt headfirst into politics earlier this year, Tesla’s brand has taken a popularity hit.
Musk’s leadership of the Department of Government Efficiency (DOGE)—and the extreme cuts it implemented after President Trump’s inauguration—was deeply unpopular with progressives, who have historically been the ones attracted to Tesla’s electric vehicles. This alienation of a large part of Tesla’s customer base hasn’t done the company any favors as far as sales are concerned.
But Musk isn’t directly to blame for all of the problems Tesla is facing. The second factor hurting the company is increased competition from electric vehicles produced by competitors around the world. Car manufacturers of all stripes, from America to Europe to Asia, are releasing EVs that are often much more affordable than Tesla’s, giving customers cheaper options to choose from.
A third factor that is likely weighing on investors’ minds is the upcoming expiration of the $7,500 electric vehicle tax credit in the United States. This EV credit was killed in Trump’s Big Beautiful Bill Act, which Elon Musk vehemently opposed. The credit expires on September 30, and investors are nervous about how the loss of the credit will impact sales of Tesla’s pricy EVs.
TSLA shares have had a rough 2025
After Tesla’s disappointing Q2 2025 earnings yesterday, the stock is down over 6% in premarket trading this morning as of the time of this writing. However, that’s not the worst news when it comes to Tesla’s stock price.
After hitting an all-time high of $488.54 per share in December 2024, TSLA shares have declined sharply. As of yesterday’s close at $332 per share, Tesla’s shares have declined 17.6% this year.
Tesla’s additional 6% decline is only compounding those losses and shows that investors are still jittery about where the company’s sales go from here.
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