Tesla's profit margin crashes to 1.4% as costs outpace record sales

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Tesla posted its financial statement for the second quarter of the year this afternoon. Earlier in July, we learned that the American automaker had had a good quarter in terms of sales , growing 25 percent year over year. Fans hoping that sales increase would result in a plenty profitable Tesla may be disappointed, though. Revenues are up but so are expenses, and the company's once-enviable double-digit profit margin has fallen to just 1.4 percent.

Tesla brought in $20.5 billion from its electric vehicle business, a 23 percent increase year over year, and just $146 million came from automotive regulatory credits. Credits have been a key to Tesla's profitability in previous challenging quarters, but they were abolished in the United States with Musk's blessing in 2025.

There was growth from its energy and storage business, which grew 13 percent year over year to revenues of $3.1 billion, but the most growth was in Tesla's services, which doubled, bringing in $4.6 billion. Tesla's shift from a one-time purchase to a monthly subscription for its much-criticized FSD partially automated driver assist—something tied to CEO Elon Musk's gargantuan remuneration package —was a big help here.

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