Elon Musk Warns Of ‘Rough’ Quarters Ahead For Tesla, But ‘Affordable’ EV Hopes Cushion Stock Slide: Retail Mood Nosedives

Tesla, Inc.’s (TSLA) underperforming stock came under further pressure in extended trading on Wednesday after a double miss, punctuated by weakness at the electric-vehicle maker’s automotive business.

Tesla was among the top five trending tickers on Stocktwits late Wednesday, with retail sentiment nose-diving to ‘bearish’ territory (35/100) by late Wednesday from the ‘neutral’ mood seen a day ago.

As retail traders discussed the results, the message volume increased to ‘high’ levels.

Tesla stock, which has lost nearly 18% year-to-date, fell 4.39% in overnight trading. 

Key numbers from the quarterly report for the second quarter of the second quarter of 2025 are as follows:

• Adjusted earnings per share (EPS): $0.40 vs. $0.52 year-ago
• Revenue: $22.50 billion vs. $25.50 billion (down 12% YoY)
• Automotive revenue: $16.66 billion vs.$19.88 billion (down 16% YoY)
• Energy generation & Storage: $2.79 billion vs. $3.01 billion (down 7% YoY)
• Gross margin: 17.2% vs. 18%

The adjusted EPS trailed the Fiscal.ai-compiled consensus of $0.41, but revenue beat the mean analysts’ estimate of $22.13 billion.

The YoY revenue drop, the biggest since the third quarter of 2012,  came about due to declines in EV deliveries and the average selling price, as well as lower regulatory credit. The company stated that these factors impacted profitability, along with higher operating expenses related to artificial intelligence (AI) and other research and development (R&D) projects.

On the earnings call, CFO Vaibhav Taneja flagged potential adverse effects for the energy business from President Donald Trump’s “one big, beautiful” bill (through expiration of energy credit) and tariffs.

In a statement, Tesla said, “Q2 2025 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.”

The company stated that it had produced its first builds of the more affordable version in June, with volume production expected in the second half of 2025. The Tesla Semi and Cybercab (a two-passenger, fully autonomous EV designed for the robotaxi service) are slated for volume production in 2026.

Offering an update on the robotaxi launch, CEO Elon Musk stated on the earnings call that the company would “greatly increase” the Austin service area beyond what the competition is doing in a couple of weeks, according to a Transcript made available by Koyfin.

He also flagged the likelihood of securing regulatory permission to launch in the Bay Area, Nevada, Arizona, Florida, and several other locations.

Comparing robotaxi service with Alphabet, Inc.’s (GOOGL) Waymo, Musk said, “Tesla is actually much better than Google by far and … anyone at real-world AI.”  

Alphabet CEO Sundar Pichai, meanwhile, said on the company’s earnings call that Waymo “launched in Atlanta, more than doubled its Austin service territory, and expanded its Los Angeles and San Francisco Bay Area territories by approximately 50%.”

Pichai also said the company is testing across more than 10 cities this year, including New York and Philadelphia.

Retail chatter around Tesla earnings was bordering on bearishness. One user braced for a “bloodbath” on Thursday.

Pointing to Musk’s comments on the earnings call about the next few quarters being rough, a user questioned the logic behind people buying the stock.

While answering analysts’ questions, Musk said the next few quarters, probably up to the second quarter of 2025, could be rough. “But once you get to autonomy at scale in the second half of next year, certainly by the end of next year, I think I would be surprised if Tesla's economics are not very compelling,” he added.

The Koyfin-compiled consensus price target of $305.05 for the Tesla stock implies further downside (8.27%) from Wednesday’s close.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

Editor's note: This copy has been updated to clarify that Tesla began production of its more affordable models in June.

Read Next: Alphabet CEO Sundar Pichai Hails ‘Standout’ Q2 As AI Powers Growth Across Divisions — Retail Cheers Rising Google Search Momentum