Tesla Q2 2025 earnings report: $22.5 billion revenue, $1.17 billion net income despite declining EV sales and regulatory credits

Tesla has held its quarterly earnings call and confirmed its bottom line took a beating in the second quarter of 2025. However, the company turned a profit despite a drop in sales and regulatory credit.

Tesla's total revenue stood at $22.5 billion, a 12 percent decline compared to the same period last year. However, it was an improvement over Q1 2025, when it reported $19 billion.

The EV company reported a net income of $1.17 billion, representing a 16 percent decrease from the figure for Q2 2024. This was still significantly better than Q1 2025, when net income was only $409 million. Operating income, however, saw a steeper decline of 42 percent year-over-year at $923 million.

One of the report's standouts was regulatory credits, which Tesla often relies on for profitability. The income stream dropped by half year-on-year to $439 million in Q1. In comparison, Tesla made $595 million from the sale of zero-emission tax credits in the previous quarter.

Meanwhile, Tesla will no longer generate revenue from regulatory credits, as a recent bill has eliminated the fines for violating Corporate Average Fuel Economy (CAFE) standards, effectively shutting down the trade.

Tesla, however, noted Q2 performance was impacted by "uncertain macroeconomic environment resulting from shifting tariffs" and "unclear impacts from changes to fiscal policy and political sentiment." The company also stated it began transitioning from an EV and renewable energy firm to also leading in AI and robotics.

Tesla earlier reported 384,122 EV deliveries in Q2 2025, a 13.5 percent decline year-on-year.