This historical review covers the quarter ended June 30, 2025. The figures and explanation were revised against Tesla’s filings on October 12, 2026.

The figures behind the Q2 2025 result

  • Revenue: $25.500bn in Q2 2024; $22.496bn in Q2 2025.
  • Operating income: $1.605bn in Q2 2024; $0.923bn in Q2 2025.
  • Operating margin: 6.3% in Q2 2024; 4.1% in Q2 2025.
  • GAAP net income¹: $1.400bn in Q2 2024; $1.172bn in Q2 2025.
  • Operating cash flow: $3.612bn in Q2 2024; $2.540bn in Q2 2025.
  • Capital expenditure²: $2.272bn in Q2 2024; $2.394bn in Q2 2025.
  • Free cash flow²: $1.340bn in Q2 2024; $0.146bn in Q2 2025.

Source: Q2 2025 financial summary. Dollar amounts are in billions. ¹ Net income attributable to common stockholders; the 2024 comparison is recast for the new crypto-asset accounting standard. ² Tesla’s capex and free-cash-flow comparison includes purchases of solar energy systems. Using the comparison figures in this report avoids mixing different accounting presentations.

Vehicle sales explain most of the revenue shortfall

Tesla delivered 384,122 vehicles in the quarter. Its production and delivery release also reports 410,244 vehicles produced and 9.6 GWh of energy-storage deployments.

The Q2 Form 10-Q attributes the automotive-sales revenue decline to fewer deliveries and a lower average selling price driven by sales mix. Regulatory-credit revenue fell by $451 million to $439 million.

Across the three reported revenue lines, automotive revenue fell by $3.217 billion, energy generation and storage fell by $225 million, and services and other grew by $438 million. Together, those changes reconcile to the $3.004 billion decline in total revenue. Service growth softened the fall, but was far too small to replace the missing automotive revenue. Segment revenue comparison.

The operating-profit decline was larger than the sales decline

Gross profit dropped from $4.578 billion to $3.878 billion, a $700 million reduction. Total operating expenses fell by only $18 million. Subtracting those expenses leaves a $682 million fall in operating income. This explains how a 12% revenue decline became a 42% operating-income decline: the smaller gross-profit pool was still supporting almost the same total operating expense. Income-statement comparison.

The expense total also hides a change in composition. Research and development rose by $515 million to $1.589 billion, while the $622 million restructuring charge in Q2 2024 was absent in Q2 2025. Tesla attributes the R&D increase primarily to AI and other programs. The year-over-year comparison therefore combines higher development spending with the removal of a prior-year charge. Operating-expense disclosures.

Profit and free cash flow tell different stories

Tesla’s reported $1.172 billion GAAP net income attributable to common stockholders fell 16%. Free cash flow fell 89%. The cash calculation is straightforward: $2.540 billion of operating cash flow minus $2.394 billion of capital expenditure left $146 million. Most cash generated from operations was absorbed by investment in that quarter. Cash-flow and earnings figures.

Free cash flow answers a specific question: how much operating cash remained after Tesla funded capital investment. The $146 million result shows that the quarter produced a narrow cash surplus even though accounting profit exceeded $1 billion. That gap is central to reading the Q2 2025 result.