Tesla Q2 Earnings Surpass Expectations, Revenues Decline Y/Y

Core Insights - Tesla reported second-quarter 2025 earnings per share of 40 cents, exceeding the Zacks Consensus Estimate of 39 cents but down from 52 cents in the previous year. Total revenues reached $22.5 billion, surpassing the consensus mark of $22.4 billion but declining 12% year over year [1][10]. Production and Deliveries - Tesla's second-quarter production totaled 410,244 units, a slight decline of 0.1% year over year, missing the estimate of 453,081 units. Vehicle deliveries were 384,122, down 13.5% year over year and below the estimate of 420,079 units. Model 3/Y deliveries were 373,728, reflecting an 11.5% year-over-year decline [2][10]. Automotive Revenues - Total automotive revenues amounted to $16.7 billion, down 16% year over year and below the estimate of $18.3 billion. This figure included $439 million from regulatory credit sales, which decreased 50.7% year over year. Excluding leasing and regulatory credits, automotive sales totaled $15.8 billion, missing projections of $17.4 billion [3][10]. Profitability Metrics - Automotive gross profit, excluding leasing and regulatory credits, was $2.2 billion, with an automotive gross margin of 14.1%, slightly up from 13.9% in the second quarter of 2024. However, the operating margin declined by 219 basis points year over year to 4.1%, falling short of the estimate of 4.7% [3][4]. Energy and Services Revenue - Energy Generation and Storage revenues were $2.8 billion, down 7% year over year and below the estimate of $3 billion. Energy storage deployments reached 9.6 GWh. Services and Other revenues totaled $3 billion, up 17% year over year but also falling short of the estimate of $3.1 billion [5]. Financial Position - As of June 30, 2025, Tesla had cash, cash equivalents, and investments totaling $36.8 billion, slightly up from $36.5 billion at the end of 2024. Long-term debt and finance leases net of the current portion decreased to $5.2 billion from $5.8 billion [6]. Cash Flow and Capital Expenditure - Net cash provided by operating activities was $2.5 billion in the second quarter, down from $3.6 billion in the previous year. Capital expenditures totaled $2.4 billion, with free cash flow generated at $146 million, significantly lower than the $1.3 billion generated in the second quarter of 2024 [7].