Core Viewpoint - Tesla has initiated limited production of a cheaper model to address declining demand, reporting a 12% revenue drop in Q2, marking its worst quarterly sales slump in over a decade [1][3]. Financial Performance - Tesla's total sales for the quarter reached $22.5 billion, despite aggressive discounting and low-cost financing strategies [2]. - The company delivered 384,122 vehicles in the quarter, reflecting a 13.5% decrease compared to the same period last year, marking the second consecutive quarterly sales decline [12]. Market Challenges - The decline in sales and profits was attributed to strong competition from cheaper electric vehicles and backlash against CEO Elon Musk's political affiliations [3][7]. - Tesla's shares have decreased by nearly 18% year-to-date, underperforming compared to rivals [6]. Regulatory and Political Environment - The company faces potential threats to profitability due to the risk of losing billions in government subsidies, a consequence of Musk's political involvement [9]. - Regulatory credits generated $435 million between April and June, down from $458 million in the same period last year [10]. Future Outlook - Tesla plans to increase production of the more affordable model in the latter half of the year to counteract the current sales slump [3]. - There is ongoing interest in the supervised self-driving Robotaxi trial, with no recent updates on regulatory approvals for expansion [14][15].