Tesla Misses Revenue Targets as Musk Warns of Rough Quarters Ahead

Tesla (NASDAQ: TSLA) posted its sharpest quarterly revenue decline in over a decade, triggering fresh concern over the automaker’s near-term trajectory. CEO Elon Musk warned investors to brace for “a few rough quarters,” citing the end of key incentives, global competition, and margin pressure.

Revenue Miss Deepens Margin Concerns

Second-quarter revenue fell 12% year-over-year to $22.5 billion, while adjusted earnings landed near $0.40 per share—below analyst expectations. Deliveries dropped 13.5%, and while gross margin held better than feared, the miss reinforced concerns over Tesla’s pricing power and cost base. Net income reached $1.2 billion, but operating income fell 42% compared to last year.

The results sparked a selloff in after-hours trading, with the stock down as much as 10% before recovering slightly.

Musk Flags End of U.S. Incentives and Demand Headwinds

On the earnings call, Musk warned that the U.S. EV market faces “at least a few rough quarters” as federal tax credits phase out. He pointed to intensifying competition from Chinese automakers, higher input costs, and increased political scrutiny of EV subsidies. The combination of waning incentives and elevated production costs threatens Tesla’s ability to sustain margins.

Still, Musk emphasized Tesla’s long-term roadmap, including its push toward autonomous driving and the introduction of a lower-cost vehicle platform.

Robotaxi Ambitions Remain Central

Tesla reaffirmed plans to launch its robotaxi service in Austin, Texas, later this year, with broader rollout expected in 2026. Musk framed the robotaxi as a transformative opportunity, describing it as a “game changer” for both revenue and cost efficiency. However, no firm timeline was offered for regulatory approval or large-scale deployment.

The company also confirmed progress on a more affordable EV model, though production ramp will be slower than initially projected.

Market Reaction and Technical Outlook

Investor sentiment turned cautious after the report. Analysts highlighted key technical support levels around $305, $292, and $265, noting that Tesla remains a high-volatility stock prone to outsized post-earnings moves. Traders are now watching for margin revisions, vehicle pricing updates, and potential commentary on robotaxi monetization in upcoming quarters.

Tesla’s valuation multiple remains elevated compared to legacy automakers, placing added weight on forward guidance and execution clarity.

Tips for Traders

• TSLA remains volatile post-earnings—consider defined-risk setups or range-based strategies near $292–$305.

• Lower-cost EV competitors may attract rotation as Tesla margins compress—monitor Chinese OEMs and sector ETFs.

• USD/CNH could reflect relative EV pricing power—track yuan sensitivity to auto trade headlines.

• Suppliers tied to autonomy may benefit if Tesla accelerates robotaxi spending—focus on lidar and AI chip vendors.

• US100 remains exposed to TSLA volatility—watch for correlation shifts in large-cap tech and consumer discretionary.