Tesla Q2 revenue beats estimates but profit falls short

Tesla reported second-quarter revenue of $28.2 billion, beating market forecasts, but adjusted earnings of just 33 cents per share missed Wall Street’s 51-cent average estimate. The electric-vehicle giant also posted its first negative free cash flow in more than two years, burning through $1.09 billion as capital expenditures hit $5.8 billion and operating costs surged 47% to $4.35 billion. CEO Elon Musk has guided for total 2026 spending above $25 billion, but the current quarterly run-rate implies roughly $17 billion for the year—well below that target. Vehicle deliveries topped 480,000 units, yet average selling prices declined, pressuring margins. Regulatory-credit revenue also fell as U.S. clean-energy policy shifts under President Donald Trump. Subscriptions for Full Self-Driving software climbed to nearly 1.5 million, up 56% year-over-year, but the long-awaited robotaxi service remains in pilot phases in Texas cities and has yet to launch in Phoenix or Las Vegas as previously planned. Tesla reiterated that preparations in those cities are ongoing, with no disclosure on fleet size or driverless miles accumulated without a safety driver. Shares slipped 2.4% in late trading after the release, bringing the year-to-date decline to 17%. The quarter also coincided with SpaceX’s record-setting IPO, which briefly made Musk the world’s first trillionaire, though SpaceX shares have since retreated. Speculation persists that Tesla and SpaceX could pursue a merger leveraging shared AI ambitions, but the earnings release offered no comment on the topic.