Tesla Inc (NASDAQ:TSLA) delivered a better-than-expected Q2, slightly beating on both revenue and meeting EPS expectations. Still, underlying weaknesses remain hard to ignore—vehicle deliveries declined 13% year-over-year, and free cash flow fell sharply to just $146 million, well below the $760 million analysts had projected. Management attributed the shortfall to heavy investment in AI initiatives and the development of its robotaxi platform, though the explanation lacked clarity. The call itself was difficult to follow, with CEO Elon Musk frequently rambling and sidestepping questions, and CFO Vaibhav Taneja proving equally hard to understand.
That said, there were some positives this quarter. Automotive gross margins showed improvement, and the Services and Other segment posted strong double-digit year-over-year growth—likely a result of a growing installed base of aging vehicles requiring more maintenance. And despite a 50% drop in regulatory credit revenue, margin performance held up reasonably well.
In characteristic fashion, Musk made sweeping claims about future revenue drivers including robotaxi, Optimus, Dojo, and Tesla’s custom AI chip. Yet again, these came with no specific timelines, only vague assurances of breakthroughs and “next year.” The lack of substance further cemented the perception that it’s more a mega-cap meme stock than a fundamentally driven investment.
For more details, key highlights, and commentary, check out the high-level earnings summary.
