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Tesla and GM Post Steep Q2 Profit Slumps on Tariffs and EV Incentive Rollbacks

Tariff surcharges on imports plus removal of federal EV incentives have undercut earnings at major automakers this quarter

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FILE PHOTO: BYD Dolphin Surf electric cars at a vehicle presentation event in Berlin, Germany May 21, 2025. REUTERS/Annegret Hilse/File Photo
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Overview

  • Tesla posted a 12% drop in second-quarter revenue to $22.5 billion and a 16% decline in net income to $1.2 billion, while deliveries fell 13.5%.
  • Revenue from Tesla’s regulatory credit sales plunged more than 50% to $439 million after key emissions incentives expired.
  • Elon Musk warned of “a few rough quarters” ahead as Tesla prepares for volume production of a lower-cost model in the second half of 2025.
  • In June, Tesla began a limited robotaxi trial in Austin and indicated plans to broaden its autonomous ride-hailing services.
  • General Motors saw its net income drop 35% due to $1.1 billion in tariff costs but sold 46,300 electric vehicles and plans U.S. plant investments to exceed 2 million annual units within 18 months.