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NEW YORK: The fallout from Elon Musk’s plunge into politics a year ago is still hammering his Tesla business as both sales and profits dropped sharply again in the latest quarter.
The car company that has faced boycotts for months said Wednesday that revenue dropped 12 percent and profits slumped 16 percent in the three months through June as buyers continued to stay away.
“The perception of Elon Musk, its chief executive, has rubbed the sheen right out of what once was a darling and soaring automotive brand,” wrote Forrester analyst Dipanjan Chatterjee in an email. Tesla is “a toxic brand that is inseparable from its leader.”
Quarterly profits at the electric vehicle, battery and robotics company fell to $1.17 billion, or 33 cents a share, from $1.4 billion, or 40 cents a share. That was the third quarter in a row that profit dropped. On an adjusted basis, the company said it earned 40 cents a share, matching Wall Street estimates.
Revenue fell from $25.5 billion to $22.5 billion in the April through June period, slightly above Wall Street’s forecast.
Tesla shares were little changed in after-hours trading as investors wait to hear from Musk on the company’s earnings call later in the afternoon.
Musk, who helped elect President Donald Trump with a massive campaign donation and then headed his DOGE cost-cutting program, has been pinning the future of the company less on car sales and more on robotaxis, automated driving software and robotics. But those businesses are yet to take off, and the gap between promise and profits was apparent in the second quarter.
A big challenge is that potential buyers not just in the US but Europe are still balking at buying Teslas. Musk alienated many in the market for cars in Great Britain, France, Germany and elsewhere by embracing far-right candidates for office on the continent. And rival electric vehicle makers such as China’s BYD and German’s Volkswagen have pounced on the weakness, stealing market share.
Tesla began a rollout of its paid pickup robotaxi service in Austin, Texas, and hopes to introduce the driverless cabs in several other cities soon. Musk has said he expects to have hundreds of thousands of the cabs on US roads by the end of next year.
In a conference call after the results were announced, Musk said the service will be available to probably “half of the population of the US by the end of the year — that’s at least our goal, subject to regulatory approvals.”
He added, “We are being very cautious. We don’t want to take any chances.”
The test run in Austin has mostly gone off without a hitch, though there have been a few alarming incidents, such as when a robotaxi went down a lane meant for opposing traffic.
With driverless taxis, though, the billionaire who upended the space race and the EV manufacturing faces tough competition. The dominant provider now, Waymo, is already in several cities and recently logged its ten-millionth paid trip.
Meanwhile other threats loom. The new federal budget just passed by Congress eliminates a credit worth as much as $7,500 for buying an electric car. It also wipes out penalties for car makers to exceeding carbon emission standards. That threatens Tesla’s business of selling its “carbon credits” to traditional car companies that regularly fall short of emission standards.
Tesla generated $439 million from credit sales, down sharply from $890 million a year ago.
One way to boost sales that Musk has long promised: A cheaper model. The company now is planning to introduce that to the market in the last three months of the year. Tesla had previously said that was going to happen by June this year.
“It appears management’s focus will now shift to robotaxis and away from deliveries growth,” said Morningstar analyst Seth Goldstein, referring to the car sales.
“If Tesla continues to execute well with vehicle autonomy and humanoid robot autonomy,” Musk said in his remarks, “it will be the most valuable company in the world.”
Musk also said he expected regulatory approval to introduce its so-called Full Self-Driving software in some parts of Europe by the end of the year. Musk had previously expected that to happen by March of this year. The feature, which is available in the US, is a misnomer because it is only a driver assistance feature.
Gross margins for the quarter, a measure of earnings for each dollar of revenue, fell to 17.2 percent from 18 percent a year earlier.
A highlight from the quarter was from something far removed from cars and robots: the company’s investment in bitcoin. That bet generated a $284 million paper gain, compared with a loss the previous quarter.

WASHINGTON: President Donald Trump unveiled an aggressive, low-regulation strategy on Wednesday to boost big tech’s race to stay ahead of China on artificial intelligence and cement US dominance in the fast-expanding field.
Trump’s 25-page “America’s AI Action Plan” outlines three aims: accelerating innovation, building infrastructure, and leading internationally on AI.
The administration frames AI advancement as critical to maintaining economic and military supremacy. Environmental consequences are sidelined in the planning document.
“America is the country that started the AI race, and as president of the United States, I’m here today to declare that America is going to win it,” Trump told an AI event in Washington.
“Winning this competition will be a test of our capacities unlike anything since the dawn of the space age,” he said, before signing several executive orders to give components of the strategy additional legal weight.
In its collection of more than 90 government proposals, Trump’s plan calls for sweeping deregulation, with the administration promising to “remove red tape and onerous regulation” that could hinder private sector AI development.
In his wide-ranging speech, Trump insisted that “winning the AI race will demand a new spirit of patriotism and national loyalty in Silicon Valley and beyond.”
Trump complained that for too long “many of our largest tech companies have reaped the blessings of American freedom while building their factories in China, hiring workers in India and slashing profits in Ireland.”
The plan also asked federal agencies to find ways to legally stop US states from implementing their own AI regulations and threatened to rescind federal aid to states that did so.
“We have to have a single federal standard, not 50 different states, regulating this industry of the future,” Trump said.
The American Civil Liberties Union warned this would thwart “initiatives to uphold civil rights and shield communities from biased AI systems in areas like employment, education, health care, and policing.”
The Trump action plan also calls for AI systems to be “free from ideological bias” and designed to pursue objective truth rather than what the administration calls “social engineering agendas,” such as diversity and inclusion.
This criterion would apply to AI companies wanting to do business with the US government.
Trump also called for AI development to be broadly immune from copyright claims — currently the subject of legal battles — saying it was a “common sense” approach.
“You can’t be expected to have a successful AI program when every single article, book, or anything else that you’ve read or studied, you’re supposed to pay for,” he said.
A major focus in the plan involves building AI infrastructure, including streamlined permitting for data centers and energy facilities that would overlook environmental concerns to build as swiftly as possible.
The administration, which rejects international science showing a growing climate crisis, proposes creating new environmental review exemptions for data center construction and expanding access to federal lands for AI infrastructure development.
Trump also called for the swift construction of coal and nuclear plants to help provide the energy needed to power the data centers.
The strategy also calls for efforts to “counter Chinese influence in international governance bodies” and strengthen export controls on advanced AI computing technology.
At the same time, the strategy calls on the government to champion US technology in conquering overseas markets, a priority that was spelled out in an executive order.
These plans will help “ensure America sets the technological gold standard worldwide, and that the world continues to run on American technology,” US Secretary of State Marco Rubio said in a statement.
Critics of the plan said the policies were a gift to US tech giants that were scaling back their goals for zero carbon emissions in order to meet the acute computing needs for AI.
“Trump’s plan reads like a twisted Gilded Age playbook that rewards the rich while punishing everyday Americans and the environment,” said Jean Su of the Center for Biological Diversity