Tesla continues its financial downturn even after Elon Musk’s White House exit

Tesla’s financial position is getting worse, as the fallout continues from CEO Elon Musk’s politics.

The electric automaker reported Wednesday that both revenue and profits fell in the second quarter of the year compared to a year earlier. It’s the second-straight negative earnings report from the company, which has suffered damage to its brand and become a lightning rod for street demonstrations.

While Tesla is still the No. 1 seller of electric vehicles in the U.S. by a wide margin, the earnings report shows a deteriorating situation with no obvious quick fix for Musk, the world’s wealthiest person.

Revenue was $22.5 billion for the three months ending June 30, down 12% from a year earlier, while earnings were 40 cents per share, down 23% from a year earlier.

Tesla said in a note to investors that the quarter was a “seminal point in Tesla’s history: the beginning of our transition from leading the electric vehicle and renewable energy industries to also becoming a leader in AI, robotics and related services.”

Musk has angered people across the political spectrum this year, first with his embrace of far-right politics and his chainsaw-wielding tenure as an adviser to President Donald Trump, and then when he and Trump had a high-profile falling-out. Musk has vowed to start a political party but so far has not followed through in any visible way.

The earnings report covers Tesla’s finances for April, May and June — a period that overlapped with Musk’s tenure in the White House. Musk left his government job May 30.

Shares in Tesla were flat in after-hours trading immediately after the earnings report.

Tesla had already warned this month that vehicle deliveries were sagging, down 14% in the second quarter from a year earlier. It was the second straight quarter of falling deliveries as Tesla faces not only damage to its brand but also increasing competition, including from Chinese electric vehicle makers.

Musk has tried to keep shareholders happy with developments on other fronts, including by trying to launch a nascent robotaxi service in Austin, Texas, although that service is small and still uses human safety observers in the vehicles. Musk has also hyped humanoid assistants as a future potential Tesla product, but none have shipped. On Monday, Tesla opened a diner and drive-in in West Hollywood, California.

Musk’s companies are also increasingly intertwined. He merged his social media app, X, with his AI startup, xAI, in March, and his rocket company, SpaceX, is an investor in xAI. This month, Tesla began integrating xAI’s chatbot, Grok, into Tesla vehicles, days after Grok went on neo-Nazi tirades. Musk has said that while he does not support merging Tesla and xAI, he will put a potential Tesla investment into the company up for a shareholder vote.

Wall Street analysts had expected Tesla revenue of $22.74 billion and earnings per share of 43 cents, according to an average of estimates compiled by LSEG.

Tesla executives, possibly including Musk, are scheduled to hold a conference call with analysts at 5:30 p.m. ET to discuss the financial results and their outlook.

Musk is deeply unpopular with the American public, with 58% having an unfavorable view of him and 33% having a favorable view, according to a polling average run by statistics writer Nate Silver.

And more protests are on the horizon. Tesla Takedown demonstrations continue to happen weekly, and more than 30 “Tesla Takedown” protests are planned for this weekend, according to a public schedule of the events. A demonstration is scheduled for Saturday at the newly opened Tesla Diner.

Tesla Takedown, an organization behind many of the protests, took note of the poor financial results Wednesday and said that the company is overvalued.

“Sooner or later, investors will wake up to the truth: Tesla is nothing but smoke, mirrors, and missed deadlines,” the group said in an emailed statement.

Tesla is also facing legal and regulatory headwinds. In Miami and Oakland, California, two separate legal proceedings are examining whether Tesla overstated the capabilities of its driver-assistance software programs, which the company calls Autopilot and Full Self-Driving.

Federal regulators with the National Highway Traffic Safety Administration are also investigating Tesla’s Full Self-Driving systems and whether they are safe to use in fog and other situations with reduced visibility.