Tesla Shares Slide as Musk Warns of Tough Quarters Ahead Amid Weaker Demand

Tesla (NASDAQ: TSLA) shares fell more than 5% in U.S. premarket trading on Thursday, after CEO Elon Musk cautioned investors about a potentially challenging period for the electric vehicle giant. The warning comes as the company struggles with softer consumer demand and the looming expiration of key federal tax incentives for EV buyers.

Speaking during Tesla’s latest earnings call, Musk acknowledged the possibility of "a few rough quarters" ahead, citing macroeconomic headwinds and shifting industry dynamics.

“I’m not saying we will, but we could—Q4, Q1, maybe Q2,” Musk said. “But once you get to autonomy at scale in the second half of next year—certainly by the end of next year—I think I’d be surprised if Tesla’s economics are not very compelling.”

Revenue and Profit Decline Amid Delivery Slowdown

Tesla reported a 12% year-over-year decline in total revenue, down to $22.5 billion, as vehicle deliveries softened in the face of weakening global demand and growing competition in the EV space.

Net income fell to $1.17 billion, down from $1.4 billion a year earlier. Earnings per share (EPS) came in at $0.40, in line with analyst expectations. According to Investing.com, analysts had forecast EPS of $0.40 on revenue of $22.4 billion.

Musk Pivots to Autonomy as Growth Catalyst

In an interview with The Wall Street Journal, Musk emphasized that Tesla is still in the "early stages" of its autonomous driving strategy, which the company hopes will become a key revenue driver in the future.

The long-term vision includes robotaxis and autonomous software services, which Tesla believes could ultimately outweigh the impact of declining car sales.

Analysts: “Ugly” Numbers, But Long-Term Potential Intact

Analysts at Canaccord Genuity described Tesla’s Q2 performance as possibly marking a bottom in the company’s current growth cycle. While they acknowledged the disappointing revenue, they remain optimistic about Tesla’s positioning in futuristic tech.

“Look, we love robotaxis. And robots,” they wrote. “Over time, Tesla is well positioned to benefit from these future-forward opportunities. But we love growth too, in the here and now.”