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Runtime: 10:23
0:00 Tesla’s Q2 Bad (And Good) News
1:26 Investors Sour on Tesla Q2 Numbers
1:42 Tesla’s Big Drop in Regulatory Credits
2:26 EU Market Sinks Further
3:16 Honda Dead Last in Europe
4:47 Tesla Aces China ADAS Test
5:40 Tesla Autopilot Safety Report Shows More Crashes
6:12 Toyota Pushes for Lower U.S. Tariffs
6:44 Tariffs Cost Hyundai $600 Million
7:14 Trump Admin Out to Kill Stop-Start
8:20 Uber Going Robotaxi Crazy
9:06 Honda Selling Last Senna V10
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TESLA’S Q2 BAD NEWS (AND GOOD)
Tesla reported its second quarter earnings and the news is both good and bad. Let’s start with the basics. It delivered just over 384,000 cars, trucks and SUVs to customers. That was down 13% from last year. Total revenue came to $22.4 billion, which was down 12%. Its operating profit plummeted 42% to $923 million. And its net profit of $1.1 billion was down 16%. OK, I’m sure you’re all thinking, ‘wow, that’s a lot of bad news, where’s the good news Sean?’ Well all the numbers I just gave you compared the second quarter of this year to the same quarter last year. But if you compare this year’s Q2 to this year’s Q1, Tesla showed some big improvements. Sales were up 14%. Revenue was up 16%. Operating profit was up 131% and net profit was up 186%. While the Shanghai and Berlin factories were closed for several weeks in the first quarter to retool for the refreshed Y, which hurt the Q1 numbers, the real backlash against Elon Musk didn’t really ramp up until the second quarter. So, that’s why we were surprised to see Tesla show a big improvement.
| Tesla Q2, 2025 Earnings | ||
|---|---|---|
| Sales | 384,122 | -13% |
| Revenue | $22.4 Billion | -12% |
| Operating Profit | $923 Million | -42% |
| Net Profit | $1.1 Billion | -16% |
INVESTORS SOUR ON TESLA Q2 NUMBERS
And yet, investors didn’t like what they saw. Yesterday we pointed out that Tesla stock had a nice run-up for the week, but after the company posted its numbers, the market gave up all those gains. Shares dropped more than 6% on the news.
TESLA’S BIG DROP IN REGULATORY CREDITS
Maybe one thing that investors didn’t like seeing is the big drop in regulatory credits. Tesla collected $435 million in Q2, a 50% drop from a year ago, and a 26% drop from Q1. The Trump Administration wants to get rid of those credits altogether, which would wipe out a significant amount of income for Tesla. Without it, its Q2 profit would have been down 63%, not 16%. Tesla won’t lose all that money. It can still sell regulatory credits in Europe. But the writing is on the wall. We’re going to see a significant hit to profits in the quarters to come.
EU MARKET SINKS FURTHER
Speaking of Europe, the new car market is weak and getting weaker. Automakers sold 1.2 million vehicles in June, down 5%. BMW and Mini showed a nice sales gain, and Honda was up a bit and Mercedes posted a small gain, but every single other car company saw its sales drop. Stellantis fell more than 16% because of big drops at Citroen and Fiat. Even Toyota and the Hyundai Group, who have been successful riding the hybrid wave, had double digit drops in sales. Tesla saw the biggest fall of all, down almost 40%. Based on sales in the first half, the entire European market is on track to sell 13.6 million vehicles this year and that‘s not enough to have a healthy auto industry.
HONDA DEAD LAST IN EUROPE
Now let’s go back to those Honda numbers for a moment. It only sold about 3,700 cars in Europe last month, placing it dead last amongst all manufacturers. Our European viewers are well aware of this, but I’m sure our viewers in the Americas and Asia will be quite surprised to learn that Honda is little more than a niche player in the European market.
TESLA ACES CHINA ADAS TEST
While Tesla’s FSD is not approved for use in China right now, its standard ADAS system, or what it calls Autopilot in the U.S., out-performed the ADAS system of every other automaker in China and some of those systems also have lidar. A Chinese media publication put 36 cars through 15 hazardous driving situations, including 6 on the highway and 9 in an urban setting, and the Tesla Model 3 and X had the top scores of any vehicle tested in the high-speed scenarios. The Model X was also the only one to avoid the simulation of a wild pig running into the road and it took the top score in urban driving as well. However, no vehicle was perfect and through the 15 hazardous situations the publication recorded 216 crashes.
TESLA SAFETY REPORT SHOWS MORE CRASHES
That’s also reflected in Tesla’s safety report that it just released for Autopilot in the second quarter, which shows a regression. The report includes data for miles driven for Tesla vehicles with Autopilot turned on, miles driven with Autopilot turned off and the U.S. average for miles between crashes. And in the second quarter, miles driven between crashes with Autopilot on, declined nearly 3% from a year ago and was also down 2.5% in the first quarter.
TOYOTA PUSHES FOR LOWER U.S. TARIFF
The U.S. and Japan reached a trade deal yesterday that lowered tariffs on Japanese imports from 27.5% to 15% but Toyota says it wants to see it lower. While the automaker says it appreciates the deal, it wants to see improved ties between the two countries as well as “further reductions in tariffs.” Previously, Toyota said it expected the 27.5% tariff rate to cost it $1.2 billion.
TARIFFS COST HYUNDAI $600 M
And U.S. tariffs are also putting a big dent in Hyundai’s profits. The automaker released its second quarter earnings and said tariffs cost it more than $600 million and that it expects an even bigger impact next quarter. Hyundai’s chief financial officer says it expects tariffs to “go down a little” from the current 27.5% on imports from South Korea but that it is hard to predict how much it will drop.
TRUMP ADMIN OUT TO KILL STOP-START
Good news for anyone that hates stop-start technology, it could become less common, at least in the U.S. As you may remember, back in May, the head of the EPA Lee Zeldin, posted on social media that “everyone” hates stop-start and that the agency is “fixing it.” And now, President Trump’s new tax bill, which eliminates penalties for missing CO2 targets, also gets rid of credits for automakers that equip emission reducing technologies, like stop-start. Nearly two-thirds of 2023 model-year vehicles in the U.S. are equipped with stop-start and one expert estimates that the credit is worth $30 per vehicle. But now that there’s no fines for missing CO2 targets and no credit for installing stop-start, there really isn’t any incentive for automakers to keep equipping it. And according to a poll we asked about stop-start back in May, most of you won’t mind seeing it going away. Half of respondents said you don’t want it, while 40% don’t mind it at all.
UBER GOING ROBOTAXI CRAZY
Uber is still going robotaxi crazy. It’s teaming up with Chinese AV company WeRide to launch the very first robotaxi service in Saudi Arabia. WeRide will provide several dozen robotaxi vans for an initial test near an airport and busy downtown area, but they plan to transition to a paid service on Uber’s platform before the end of the year. The partnership between Uber and WeRide was actually first formed in September of last year with an announcement to launch robotaxi services in Abu Dhabi and Dubai. On top of that, Uber has a robotaxi partnership with Chinese robotaxi operator Baidu for international markets and in the U.S. it’s working with Waymo, Volkswagen and Lucid.
HONDA SELLING SENNA V10
Honda is going to auction off the last V10 engine it made for Ayrton Senna in the 1990 Formula 1 season. The engine has been completely disassembled by mechanics from Honda Racing and laid out in a large glass display case. That entire setup will be auctioned off during the Monterey Car Week in the middle of August and I think this is about one of the coolest things that any race fan could put on display.
While that brings us to the end of this show, don’t forget to tune into Autoline After Hours at 3PM EST today when we’ll be talking about what vehicles have the best interiors. I hope to see you for that.
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The acceptance of stop-start is going to be highly dependent on the how well it is implemented. Some auto companies have it working seamlessly and others have rough implementations.
George, I agree and also think it is something you need to get used to. As an example, drivers used to complain about feeling an unexpected transmission shift back in the early 1980s… having been accustomed to 3-speed automatic transmissions with open converters and not yet adjusted to the feel of 4-speed automatic transmissions with a lock-up converter. Today, I suspect more than a few people are still adapting to their 10-speed automatic transmission yet enjoying the fuel efficiency and performance benefits.
I’ve had a Mini and a Cayman with stop/start, and both work smoothly enough. Also, both have conveniently located switches to turn it on and off. I’d turn it on, if at a red light that I knew wouldn’t change for a while, but turn it off when driving on a road with a 4-way stop every half mile. I don’t want the engine to turn off for a half second at a stop sign. That’s just extra wear on the starter and ring gear. Well, the manual transmission Cayman wouldn’t shut the engine off at stop signs, because it does that only in neutral with the clutch not depressed. Both cars default to stop/start “on,” which I’d rather not have, though if the switch is conveniently located, it’s no big deal to hit it with every start, if that’s what you want.
I don’t think I ever drove a car with start-stop. While, as a conservative, I like the idea, I have heard too damned many complaints about how those systems actually work.
As for which cars have the best interiors, with the exception of Rolls, Bentley and some top dog Mercedes Maybach, today’s interiors SUCK. The cars who HAD the best interiors were from the 30s up to (in the case of European cars) the 50s.
Yet one more reason to buy used, regardless of your budget.
I have stop/start on my cars and I don’t find it annoying but also don’t find it makes much of a difference in my typical drive cycle. The aftermarket for one of my vehicles makes a device you plug into the OBD port and it permanently disables stop/start. I don’t have that device but I wonder if such devices exist for other makes/models for those who really hate stop/start and don’t want to push a button every drive cycle. Either way, nobody is really going to miss stop/start; even those who didn’t mind it.
There are claims that starters have been improved to reliably take the extra use of stop/start. If companies quit having stop/start, will they downgrade the starters? I’ve always been inclined to shut off the engine the old fashioned way, if I’d be stationary for a long time.
To me, the ultimate system for non-performance cars is the hybrid system used by Toyota, Ford Maverick, and maybe some others. The engine and the MG that starts it are always geared together, so there is no extra wear on anything. Also, with the electric A/C, the engine runs only about 10% of the time if you sit in the car with the A/C on.
I’ve also had stop/start in a few vehicles. My complaint is that even when conditions (you would think) are ideal, the engine stops for only 30 seconds, even if I’m at a one- or two-minute traffic light, before restarting; not saving much. And while it is pretty smooth and not too intruding, what’s the point.
Interesting news about Tesla and it only makes wonder more about why it is considered a tech company and not an automotive company. While is get that its high stock valuation puts it in the the stratosphere of companies like Microsoft, Google, Apple and others, they, though sell tech and tech software, Tesla on the other hand sells vehicles and builds Supercharger (and maybe [soon] robots)! I understand that the software in their vehicles are class leading, but is it comparable to the to that of the that in personal computers or those in heavy industrial computer farms that the major tech firms operate? I’m talking about Tesla and not the other organizations that Musk runs, like SpaceX, the his solar company and the train business he operates. Tesla for now sells mainly cars, not computers or even their tech, so why do so many see them as a tech company?! The argument that Tesla is a tech company that sells cars, would be like GM calling itself a tech company because it put Google’s operating system into all its vehicles and it runs all of its software! I’m not saying that Tesla’s software isn’t at the front of the class, but its outfitted to run the automobiles they sell, not serve as the bases for organizations from municipalities to mega corporations and fortune 500 companies, like Apple, Microsoft, Google and others! While its valued like a tech company, yet it, at the moment, only makes vehicles like another automotive OEM. What am I missing here?
The Senna V 10, I wish. I do just happen to have room for it,but not the money to aquire it, bummer
ChuckGrenci, I found that stop/start in non-hybrids might start the engine to provide heat or a/c, but would leave the engine off more with the HVAC turned off. Toyota hybrids sometimes waste gas running the engine when using cabin heat.
As a Chrysler tech since 1982 I would say that the Stellantis vehicles like Ram trucks that use a mild hybrid 48 volt system with a motor-generator unit are pretty seamless in stop-start and don’t put extra wear on the ring gear. On my own 2019 Cherokee with a 2.0 turbo I press the stop-start off switch almost every time I start the vehicle to save wear on both the ring gear and supposedly heavy duty starter.
Start-stop systems, when done right, are an adaptation from hybrids. More robust starters and algorithms make the “good” versions of start-stop highly reliable. So when in doubt, trust a stop-start system from an OEM with established experience in hybrids… Toyota, Ford, Honda.