Gross margin of 16.8% fell short of the 19.4% forecast despite revenue and free cash flow beating estimates.
Tesla Inc reported second-quarter adjusted earnings per share of $0.33, missing the $0.52 estimate as gross margins compressed to 16.8%. Revenue reached $28.2 billion, surpassing the $25.99 billion forecast, while free cash flow improved to negative $1.09 billion from an expected negative $3.64 billion.
Analysts had anticipated a gross margin of 19.4%, but automotive revenue of $20.52 billion still exceeded the $18.68 billion projection. Active Full Self-Driving subscriptions grew to 1.48 million, slightly above expectations, offering a counterbalance to near-term profitability concerns.
The results highlight ongoing tension between Tesla’s core automotive margins and its broader growth initiatives, including robotaxi expansion and energy storage. Market reaction may focus on margin trends despite the revenue and cash flow beats.