Tesla misses profit expectations despite revenue surge

Tesla reported mixed second-quarter financial results, missing profit expectations despite posting stronger-than-expected revenue as the company continues to ramp up spending on artificial intelligence, robotics and autonomous vehicles.

Revenue rose 26% year-on-year to US$28.24 billion, ahead of Bloomberg consensus forecasts of US$26.32b.

However, adjusted earnings per share came in at US$0.33, well below the US$0.50 expected by analysts. Adjusted EBITDA was US$3.27b, compared with expectations of US$4.0b.

Tesla shares fell more than 3% in after-hours trading following the results.

The EV maker said free cash flow was negative US$1.09b during the quarter, although that was an improvement on analyst expectations of a US$3.64b outflow.

Chief executive Elon Musk said 2026 would be a “massive cap-ex” year, with chief financial officer Vaibhav Taneja confirming capital expenditure would exceed US$25b as Tesla invests heavily in Optimus humanoid robots, AI infrastructure and Cybercab production.

Tesla said production of its Optimus humanoid robot remains on track to begin later this year, with the initial units to be used internally for training and development.

The company also confirmed its Robotaxi service has expanded to seven major metropolitan areas, with unsupervised rides now operating in Austin, Miami, Orlando and Tampa. Musk said Robotaxi mileage is growing by more than 10% each week, although safety considerations would determine the pace of further expansion.

Tesla reported 1.48 million active Full Self-Driving subscriptions at the end of the quarter, up 56% from a year earlier.

The financial results follow a strong second quarter for vehicle deliveries, with Tesla delivering 480,126 vehicles globally, up 25% year-on-year and well ahead of analyst forecasts of about 397,500 vehicles.

Energy storage deployments also continued to grow, reaching 13.5GWh during the quarter, up from 8.8GWh in the first quarter.

Tesla attributed the stronger sales performance to the full production ramp-up of the redesigned Model Y, continued pricing competitiveness and strong demand in international markets, particularly Europe and China. Meanwhile, the expiry of the US federal EV tax credit is expected to weigh on sales in the American market.