Tesla reported a GAAP net income of $1.2 billion and non-GAAP net income of $1.4 billion for the second quarter of 2025. Revenue for the quarter was $22.5 billion, a 12% decrease compared to the same period in 2024. The year-over-year decline was driven by reduced vehicle deliveries, a lower average selling price, and decreased regulatory credit revenue. The company’s free cash flow for the quarter was $146 million, down 89% year-over-year.
Tesla began limited commercial operation of its Robotaxi service in Austin, Texas during the quarter. The company also reported delivering its first fully autonomous customer vehicle, though this still requires active driver supervision. Tesla believes its camera-only autonomous system, trained on data from its global fleet, will allow it to scale with minimal marginal investment.
The company produced 410,244 vehicles in the quarter, nearly flat year-over-year. Deliveries fell 13% to 384,122 vehicles. Model 3 and Model Y accounted for the vast majority of both production and deliveries. The company launched a new Long Range RWD Model Y variant in May, which starts at under $45,000 before incentives and offers 357 miles of range.
In the energy segment, trailing twelve-month energy storage deployments reached a record for the twelfth consecutive quarter. Tesla also deployed its first Megapack units from the Megafactory in Shanghai. The company stated that its energy storage products can be deployed four times faster than fossil fuel generation assets of equivalent capacity. Powerwall deployments also reached a record for the fifth consecutive quarter.
The company expanded its global Supercharger network by 18% year-over-year to more than 70,000 connectors. Gross profit for the energy and services segment reached a record $846 million. Tesla also cited improved gross profit from Supercharging and reported using AI-powered customer service agents and service technician tools to streamline support.
In core technology, Tesla expanded its AI compute infrastructure to a total of 67,000 H100-equivalent GPUs. A production Model Y completed what the company described as the first autonomous customer delivery, covering a ~30-minute route from the factory to the customer’s residence. The Robotaxi mobile app launched with functionality tied to users’ Tesla profiles.
Capital expenditures for the quarter were $2.4 billion. Operating income was $923 million, down 42% from Q2 2024, resulting in an operating margin of 4.1%. Tesla cited higher research and development expenses—especially related to AI—and an increase in stock-based compensation as contributing factors to lower profitability.
Looking forward, Tesla stated that volume production of a more affordable vehicle is expected in the second half of 2025. Development of the Tesla Semi and the purpose-built Robotaxi, named Cybercab, continues, with both scheduled for volume production in 2026. Tesla also reaffirmed plans to begin lithium refining and cathode production in the U.S. in 2025.
The company ended the quarter with $36.8 billion in cash, cash equivalents, and investments, a slight decrease from the previous quarter. It stated that it retains sufficient liquidity to fund its long-term product roadmap and capacity expansion efforts despite macroeconomic uncertainty.
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