Topline

Tesla reported drops in revenue and profit Wednesday, as it shared second quarter earnings following a historic decline in quarterly deliveries in the wake of Elon Musk’s alliance with Trump and their headline-grabbing fallout.

Economists expect double-digit drops for the automaker’s top and bottom lines after a record decline for quarterly vehicle deliveries. NurPhoto via Getty Images

Key Facts

Tesla reported a 12% drop in quarterly revenue at $22.5 billion, which topped FactSet expectations by $22 million but marked the company’s worst revenue decline in over a decade, according to Reuters.

Tesla attributed the slump to its 13% decline in vehicle deliveries during the second quarter and less cash from selling regulatory credits, with the 13% drop surpassing the automaker’s largest year-over-year record set in the previous quarter.

Shares of the automaker are up a fraction of a percent following the publication of its earnings, barely maintaining a streak of gains that began on July 7.

Crucial Quote

Wedbush Securities analyst Dan Ives wrote Tuesday the “set-up” to Tesla earnings is a “dramatically different one than three months ago.” He predicted Tesla’s AI initiatives would be “front and center for investors” on Tesla’s earnings call as analysts would be “listening carefully” about the company’s possible investment into Musk’s xAI.

When Is Tesla’s Earnings Call?

Key Background

Tesla’s shares surged in recent months after Musk’s role as a special government employee with the Trump administration ended, though the stock has declined more than 4% over the last month. New car registrations for the company fell through the first five months of the year in Europe, China and California. Musk’s separation from President Donald Trump and subsequent fallout, which exploded into a sharp back-and-forth on social media, continued in recent weeks as he criticized Trump’s spending bill. Analysts have expressed some optimism for Tesla, however, after the company rolled out a limited launch of its anticipated robotaxi driverless vehicle service in Austin, Texas, in June.

What To Watch For

Tesla and Alphabet (Google’s parent company) are the first of the “Magnificent Seven” stocks to issue Q2 reports. They precede reports from Meta and Microsoft on July 30, and from Amazon and Apple on July 31. Nvidia will be the last to release its quarterly report on Aug. 27. Earnings from the world’s largest stocks are expected to be in line with better-than-expected reports by companies listed under the S&P 500 in recent weeks. “Magnificent Seven” firms are expected to post earnings growth of 14% in the second quarter, compared to 3.5% by the remaining 493 companies under the index, according to FactSet.