Tesla (TSLA) reported a slight earnings and revenue miss in the second quarter but said its “more affordable” model was still slated for production in the second half of 2025.

Tesla reported second quarter revenue of $22.50 billion vs. $22.64 billion expected (per Bloomberg consensus), a 12% drop compared with the $25.05 billion reported a year ago. Tesla posted adjusted EPS of $0.40 vs $0.42, with operating income coming in at $923 million vs. $1.23 billion expected.

Of particular interest, Tesla’s revenue from the sale of regulatory credits fell to $439 million from $890 million a year earlier, and will continue to drop following passage of the “One Big Beautiful Bill” (OBBB).

“We continue to expand our vehicle offering, including first builds of a more affordable model in June, with volume production planned for the second half of 2025,” the company said in a statement. Tesla also said its purpose-built robotaxi was still scheduled for volume production starting in 2026.

Tesla stock slumped over 6% in premarket trading on Thursday, after starting to slide during the company’s earnings call.

CFO Vaibhav Taneja said on the call that the OBBB recently passed by Congress would affect Tesla’s business, leading to a “pull forward” in sales ahead of the $7,500 tax credit expiring at the end of Q3.

“Given the abrupt change, we have limited supply of vehicles in the US this quarter,” Taneja said. “We may not be able to guarantee delivery orders placed in the later part of August and beyond.”

Taneja also said Tesla would ramp up volume production of the upcoming affordable model once the EV tax credit expired. Nevertheless, Musk admitted that once the credit expires, Tesla could experience “a few rough quarters.”

Read more: Live coverage of corporate earnings

A year ago, Tesla said in its Q2 earnings report that production remains on track for new vehicles, likely including a cheaper EV, in the first half of next year.

There have been no indications or even renderings of a new vehicle, let alone production of a vehicle priced around $30,000. Tesla’s cheapest EV is the rear-wheel-drive Model 3 sedan, which starts at around $43,000 without incentives.

Tesla has expanded its robotaxi testing in Austin, Texas, with a bigger operating area and likely more vehicles coming.

Musk said the company would expand testing to the San Francisco Bay Area, but reports suggest the applications for those state permits have not been submitted. Separately, Bloomberg reported on Wednesday that Tesla was in talks with Nevada officials to test the company’s robotaxi service.

A driverless Tesla robotaxi, a ride-booking service, moves through traffic on June 22 in Austin, Texas. (AP Photo/Eric Gay) · ASSOCIATED PRESS

Tesla’s second quarter earnings report comes at a time when the S&P 500 (^GSPC) and Nasdaq (^IXIC) are surging to new highs, bucking Trump’s tariff war that led to broad-based selling and fears of a global economic slowdown.

Musk’s reputational hit stemming from his political activities, the rise of more competition, and US consumer preferences for vehicles like hybrids have Tesla and the EV industry as a whole worried. For Tesla in particular, weakness in key regions like Europe has been an ongoing issue, and the latest registration data shows US sales sliding as well.

This resulted in Tesla delivering only 384,122 vehicles globally in Q2, a 13.5% drop year over year. The changeover to the refreshed Model Y may have blunted sales. But the question for management is the availability picture for that new Model Y in Tesla’s main selling regions.

“It is difficult to measure the impacts of shifting global trade and fiscal policies on the automotive and energy supply chains, our cost structure and demand for durable goods and related services,” Tesla said in its Q2 shareholder deck. “While we are making prudent investments that will set up both our vehicle and energy businesses for growth, the actual results will depend on a variety of factors, including the broader macroeconomic environment, the rate of acceleration of our autonomy efforts and production ramp at our factories.”

StockStory aims to help individual investors beat the market.

Pras Subramanian is the lead auto reporter for Yahoo Finance. You can follow him on X and on Instagram.

Click here for the latest stock market news and in-depth analysis, including events that move stocks

Read the latest financial and business news from Yahoo Finance