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Tesla shares are down by about 9% in early trading on Thursday, pressured by its steepest revenue decline in at least a decade and the prospect of several “rough” quarters ahead.
For context, Tesla reported $22.496 billion in revenue for Q2 2025, surpassing the IR-compiled consensus estimate of $21.934 billion. However, its year-over-year revenue fell by 11.78%, marking its sharpest decline in about a decade.
Tesla’s free cash flow contracted to just $146 million, and its cash balance declined for the first time in years due to increased tariff costs by around $300 million.
Regarding Tesla’s earnings per share (EPS), the company reported $0.40 on a non-GAAP basis, exceeding expectations of $0.39. Without the approximately $400 million contribution from its ‘Other Income’ section, which includes gains and losses from foreign exchange holdings and Bitcoin revaluation, EPS would have been around $0.33 per share.
Tesla’s ‘Other Income’ segment combines gains and losses from FX holdings and revaluation of its Bitcoin holdings. Roughly half of the $400 million ‘Other Income’ came from the revaluation of Bitcoin.
On March 31, Tesla’s Bitcoin stash of 11,509 BTC was valued at around $950 million, based on a closing price of $82,548.91 per BTC. By June 30, its value had risen to $1.233 billion with a closing price of $107,135.34 per BTC, resulting in a revaluation gain of approximately $283 million.
Tesla confirmed that its more affordable model is merely a stripped-down version of the Model Y, raising concerns about cannibalization without a new form factor. The company’s AI efforts, particularly with robotaxis and Optimus humanoid robots, remain a bright spot.
Elon Musk stated during Tesla’s earnings call: “Once you get to autonomy at scale in the second half of next year, certainly by the end of next year, I think I’d be surprised if Tesla’s economics are not very compelling.”
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What was Tesla's year-over-year revenue decline for Q2 2025, marking the sharpest decline in about a decade?
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