NEW YORK: Tesla shares fell in after-hours trading after the electric vehicle maker reported weaker-than-expected quarterly profits despite stronger auto sales and rising revenue.
The company posted second-quarter profit of $1.1 billion, down about five percent from the same period last year. Earnings came in at 33 cents per share, below analysts’ expectations of 53 cents.
Revenue rose 26 percent to $28.2 billion, helped by improved vehicle sales, including a recovery in European markets.
However, Tesla said profitability was hit by lower vehicle selling prices, reduced revenue from regulatory credits and energy warranty-related charges.
Investors were also focused on Tesla’s rising capital spending, which more than doubled to $5.8 billion during the quarter.
Chief Executive Elon Musk described the company’s expansion drive as possibly the fastest industrial scale-up in the United States since World War II.
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Tesla is working with Musk’s other companies, SpaceX and xAI, on Terabab, a $20 billion chip-building project in Austin. The company also said production of its Cybercab had started in Texas, while production of the Tesla Semi remained on track for 2026.
Musk also defended Tesla’s robotaxi ambitions, saying the company was working toward extremely high reliability before expanding the service.
Analysts, however, raised concerns over the cost of Tesla’s technology buildout and the lack of clarity over expected returns.
CFRA Research analyst Garrett Nelson said Tesla had not been transparent enough with investors about the payoff from its heavy spending.
Chief Financial Officer Vaibhav Taneja said research and development costs were expected to keep rising in 2026 and beyond.
Tesla shares dropped 4.1 percent in after-hours trading.
