Austin: Tesla's net income fell 16% year-on-year in the second quarter of this year, falling short of market expectations, according to financial results released on Thursday. The American electric vehicle manufacturer reported a net profit of $1.2 billion, down from $1.4 billion in the same period last year.

According to Anadolu Agency, Tesla's revenues also decreased by 12% in the second quarter, dropping to $22.5 billion from $25.5 billion in the second quarter of 2024. The company's earnings per share decreased from $0.4 in the second quarter of 2024 to $0.33 this year, further missing market expectations.

Tesla produced 410,244 cars globally in the second quarter of 2025 and delivered 384,122. While production remained mostly unchanged year-over-year, vehicle deliveries were down by 13%. The company also highlighted the launch of its first robotaxi service in Austin in June, which is expected to enhance profitability despite its initially limited scope.

The company began the first production run of a more affordable model in June, with plans for mass production in the latter half of the year. The "Semi" and "Cybercab" models are slated for mass production in 2026. Tesla emphasized its ongoing investments in capital expenditures and research and development while maintaining a strong balance sheet amidst an uncertain macroeconomic environment.

Tesla faces increasing competition from Chinese EV manufacturers offering newer and cheaper models. Additionally, CEO Elon Musk is dealing with political challenges, including anti-Tesla rallies impacting the company's image and sales. Musk's prior support for President Donald Trump has led to political tensions, with Trump threatening potential repercussions for Musk's businesses.

Tesla was the worst-performing company among the "Magnificent Seven" this year, highlighting the challenges it faces in the current market landscape.