(MENAFN) Tesla, the American electric vehicle (EV) powerhouse, reported a 16% year-over-year decline in net income for the second quarter of 2025, missing analysts’ expectations, according to its financial results released Thursday.

The company posted a net profit of $1.2 billion for the April-June period, down from $1.4 billion during the same quarter last year.

Revenue also saw a sharp drop, falling 12% year-over-year to $22.5 billion—down from $25.5 billion in Q2 2024.

Earnings per share dropped to $0.33, compared to $0.40 in the same quarter last year.

Both revenue and profit figures came in below market forecasts, signaling mounting challenges for the EV giant.

Tesla produced 410,244 vehicles worldwide during the second quarter and delivered 384,122. While overall production remained flat compared to last year, deliveries slipped by 13%.

In a statement, the company highlighted the rollout of its first robotaxi service in Austin this June. It said that although the launch will begin on a small scale, the autonomous strategy is designed to “increase profitability.”

The statement also revealed that Tesla began initial production of a lower-cost model in June, with full-scale production slated for the second half of the year. The “Semi” and “Cybercab” models are scheduled to enter mass production in 2026.

"Despite a sustained uncertain macroeconomic environment resulting from shifting tariffs, unclear impacts from changes to fiscal policy and political sentiment, we continue to make high value investments in CapEx and R&D, while ensuring a strong balance sheet," the company added.

Tesla faces intensifying competition from Chinese automakers, which are launching newer, more affordable EV models, eating into Tesla's global market share.

At the same time, CEO Elon Musk is dealing with political fallout. A series of anti-Tesla demonstrations have damaged the company’s public image and dampened sales.

Musk was among the top donors to President Donald Trump in the latest U.S. presidential election.

He also played a central role in the Trump-backed Department of Government Efficiency (DOGE), which aimed to scale back federal agencies—especially those regulating Musk’s businesses. Musk's official role with DOGE ended in May.

However, tensions between Musk and Trump later escalated, after Musk criticized Trump’s “big, beautiful bill,” saying it would expand the federal deficit.

In response, Trump said the billionaire would “head back home to South Africa” if EV subsidies were withdrawn.

The president also threatened to investigate deporting Musk and directed DOGE to scrutinize the federal incentives Tesla and Musk’s other companies had received.

This year, Tesla has been the worst-performing stock among the so-called “Magnificent Seven.”

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