In Q2 2025, Tesla’s electric vehicle (EV) business experienced a year-over-year decline in revenue and deliveries.
Total automotive revenue fell 16 percent YoY to $16.66 billion, largely due to a drop in vehicle deliveries, lower average selling prices (ASP), and reduced regulatory credit income.
Vehicle deliveries totaled 384,122 units, down 13 percent YoY, with Model 3/Y accounting for 373,728 units, a 12 percent decline, and other models dropping 52 percent.
Tesla reduced prices across several models during Q2 2025, particularly in the U.S., with cuts of up to $7,500 to boost demand ahead of the EV tax credit phase-out. The company also offered incentives like 0% financing and free Supercharging.
Despite these efforts, average selling prices declined due to a mix shift toward lower-priced models and global demand pressure. In China and Europe, promotions continued, but Model Y sales weakened. Overall, Tesla’s pricing trend in Q2 2025 was downward, contributing to lower automotive margins and revenue.
Despite these setbacks, Tesla began initial production of a more affordable model in June and plans volume production in the second half of 2025.
Production of the Semi and Cybercab models is also on track for 2026. Tesla produced its 8-millionth vehicle during the quarter and continued investing in autonomous vehicle development, including launching its Robotaxi service in Austin.
Gigafactory Shanghai maintained its role as a key export hub, while delivery records were set in markets such as South Korea, Malaysia, and Singapore.
The company also launched Model Y in India, entering the world’s third-largest car market.
Global vehicle inventory levels rose to 24 days of supply, up from 18 days a year earlier, indicating a slower sales pace relative to production.
GreentechLead.com News Desk