Profit margins halved and free cash flow turned negative, overshadowing Tesla’s $28.2 billion quarterly sales.
Tesla reported second-quarter revenue of $28.2 billion, topping the $26.2 billion consensus by $2 billion. However, earnings per share fell to $0.33, well below the $0.51 analysts expected, driving a 14.5% drop in shares the following trading day.
Net margins collapsed to 3.7%, less than half the three-year average of 8.7%, while automotive margins excluding regulatory credits slipped to 16.3% from 19.2%. Free cash flow turned negative as capital spending more than doubled, with management guiding full-year outlays above $25 billion.
The S&P 500 declined just 1.2% over the same period, and EV rivals like Rivian and GM saw far smaller losses, underscoring Tesla’s isolated weakness.