Asger Risom
Tesla has posted its steepest revenue drop in over 10 years, prompting Elon Musk to vow a more affordable model to stay competitive amid rising global EV rivalry.
Tesla has posted its steepest revenue drop in over 10 years, prompting Elon Musk to vow a more affordable model to stay competitive amid rising global EV rivalry.
Tesla’s Sales Hit a Decade Low
Tesla reported a 12% drop in revenue for Q2 2025, falling short of analyst expectations and marking its worst sales slump in over a decade. Deliveries were down 13.5% compared to last year.
Musk Admits to ‘Rough Quarters Ahead’
CEO Elon Musk acknowledged that the company “could have a rough few quarters” before rebounding, stressing that Tesla’s long-term strategy hinges on autonomous driving technology.
Profits Under Politically Induced Pressure
Tesla’s profits have been hit by weaker demand, global competition from cheaper EVs, and political backlash tied to Musk’s former ties to Donald Trump and right-wing politics, leaving the company vulnerable to U.S. policy shifts.
Shares Down Nearly 18% in 2025
Investor confidence has been shaken, with Tesla’s share price falling almost 18% year-to-date amid concerns over sales declines, shrinking subsidies, and heightened trade tensions.
A Push for Cheaper Models
To regain market share, Tesla plans to ramp up production of a lower-cost electric vehicle in the second half of 2025. Details remain scarce, but Musk has described the model as key to future growth.
Competition Is Heating Up
Chinese EV brands like BYD are undercutting Tesla on price while expanding rapidly into European and global markets, forcing Tesla to rethink its pricing strategy.
Autonomy Seen as Tesla’s Future
Musk continues to bet heavily on Tesla’s robo-taxi service and AI-driven products, with volume production of the Cybercab and Semi Truck slated for 2026. Early trials have already begun in Texas.
Political Fallout Adds Pressure
The company’s strained relationship with the White House following Musk’s break with Trump has fueled speculation that Tesla could lose key subsidies, further squeezing its margins.
Can Tesla Bounce Back?
With declining sales, rising competition, and reliance on future AI and robo-taxi revenues, Tesla’s next year could be make-or-break for maintaining its EV dominance.
