Tesla’s Q 2 revenue increased by 26% year-on-year, profits were cut in half, and capital expenditures increased significantly
Total revenue in the second quarter was US$28.236 billion, a year-on-year increase of 26%, driven by growth in vehicle deliveries, growth in services and other businesses, and positive foreign exchange effects. Quarterly operating profit was only US$398 million, a year-on-year decrease of 57%, and operating profit margin was 1.4%, which was dragged down by an increase in operating expenses (AI and R&D, equity incentives, SG&A), a decrease in regulatory points revenue, a decrease in average selling price, and an increase in energy warranty expenses. Cash and short-term investments at the end of the quarter were US$43.524 billion, a decrease of approximately US$1.2 billion from the previous quarter, as free cash flow was US$1.092 billion (capital expenditures reached US$5.789 billion, an increase of US$3.3 billion from the previous quarter). Automotive business revenue was US$20.516 billion, a year-on-year increase of 23%; energy generation and storage revenue was US$3.139 billion, an increase of 13%; service and other revenue was US$4.581 billion, an increase of 50%. GAAP net profit was US$1.114 billion, a year-on-year decrease of 5%; non-GAAP net profit was US$1.153 billion, a year-on-year decrease of 17%; GAAP diluted earnings per share was US$0.32, and non-GAAP diluted earnings per share was US$0.33. Deliveries in the second quarter hit record highs, with deliveries in multiple markets (South Korea, Australia, Japan, Taiwan, etc.) reaching record highs. Model YL was launched in the United States in July. Energy storage deployment has set a record in the EMEA region, and the Shanghai Megafactory continues to ramp up production; the new Texas Megafactory will start producing Megapack 3 and Megablock. Robot business: The Fremont factory has dismantled the Model S/X production line and installed the Optimus first-generation production line, which is expected to be put into production in the near future; the construction of the Texas factory is in full swing. AI training computing: Texas on-site computing capacity (MW) more than doubled in the first half of the year, and Cortex 2 supports autonomous driving and humanoid robot software training. Batteries: 4680 battery capacity increased to over 40 GWh, Nevada LFP battery capacity 7 GWh (early ramp), Texas cathode materials and lithium refining 10 GWh and 30 GWh each (early ramp). FSD v14 lite begins rolling out to AI3 hardware customers in the United States and South Korea (July). The FSD adoption rate has reached a new high, with the FSD subscription rate for new cars in North America exceeding 55%. The Netherlands, Lithuania, Estonia, Denmark, and Belgium have received approval for FSD deployment. Robotaxi: Cybercab started production and provided ride-hailing services to employees in the Texas factory; the unsupervised operation area in Austin was expanded, and unsupervised services were launched in Miami, Orlando, and Tampa in July. Tesla Semi and Megapack 3 are scheduled to be put into production in 2026; the first-generation Optimus production line is expected to be put into production in 2026. The company is focused on maximizing factory capacity utilization, and delivery and deployment will be affected by total product demand, supply chain readiness and sales and self-operated fleet allocation decisions. We will continue to maintain a strong balance sheet and maintain sufficient liquidity to support our product roadmap, long-term capacity expansion (including further vertical integration) and other expenditures. In the long term, hardware-related profits will be accompanied by accelerated growth in AI, software and fleet base profits. Tesla Semi and Megapack 3 are scheduled to be put into production in 2026; the Optimus first-generation production line is being installed and is expected to be put into production in 2026. Capacity construction and ramp-up of multi-year infrastructure projects such as AI computing, solar energy, battery materials and semiconductor manufacturing are underway.