Tesla's Q2 revenue hits a record as profit collapses 18%

A blowout top line masked a crumbling bottom line, as Tesla's operating margin cratered once federal tax credits disappeared and spending doubled.

Tesla reported record second quarter revenue of $28.24 billion, up 26% year over year and above the roughly $26.4 billion Wall Street expected, while deliveries hit a record 480,126 vehicles. But non-GAAP earnings per share came in at just $0.33, badly missing the $0.53 estimate and down 18% from a year earlier, as operating income collapsed 57% to $398 million and operating margin narrowed from 4.1% to 1.4%. The company posted negative free cash flow of $1.09 billion, its first cash burn since early 2024, after capital expenditure more than doubled to $5.8 billion. Much of the profit hit traced to a 67% drop in regulatory credit revenue, down to $146 million, after the federal EV tax credit expired in September 2025.