Higher operating costs offset record vehicle deliveries, pushing Tesla’s second-quarter profit down 5%.
Tesla reported a 5% decline in second-quarter net profit despite achieving its highest quarterly vehicle sales on record, as higher operating costs and mounting competitive pressures weighed on earnings.
The electric vehicle maker reported net income of $1.114 billion for the April-June period, down from the same quarter a year earlier. Revenue, however, climbed 26% year over year to $28.236 billion, driven by strong vehicle deliveries and continued expansion into international markets.
Tesla delivered a record 480,126 vehicles during the quarter, marking the highest sales volume in the company’s history. Even so, profitability was pressured by a sharp increase in operating expenses, which rose 47% to $4.353 billion, largely due to investments in new technologies and artificial intelligence.
The company also faced pricing pressure after reducing vehicle prices in several markets following the expiration of government incentives, while tariffs, geopolitical tensions, including the conflict involving Iran, and intensifying competition from Chinese automakers further affected margins.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) fell 4% year over year to $3.273 billion.
In a statement, Tesla said it achieved record sales volumes in several international markets during the second quarter, including South Korea, Australia, Colombia, Japan, Taiwan, Thailand, Portugal and Chile, underscoring its continued global expansion.
Looking ahead, the company highlighted progress on two of its most ambitious projects. Tesla has begun production of the Cybercab, its fully autonomous vehicle designed for a future robotaxi fleet, while production lines are also being installed for the first generation of Optimus, the humanoid robot that CEO Elon Musk has described as a key long-term growth driver.
Both initiatives are part of Tesla’s aggressive capital investment strategy, with capital expenditures expected to exceed $25 billion in 2026.
