Tesla Pivots to AI and Robotaxis Amid Declining EV Revenue

Tesla's second-quarter earnings reveal a 12% year-over-year revenue decline to $22.5 billion, with automotive revenue dropping 16%. Despite matching EPS expectations at $0.40, operating income fell 42% as margins compressed to 4.1%. The company's free cash FLOW plummeted 89% to $146 million, underscoring mounting financial pressures.

Investors reacted swiftly, sending shares down 2.87% in after-hours trading following the report. Tesla's strategic narrative has visibly shifted toward AI development and robotaxi services, with CEO Elon Musk emphasizing these initiatives during the earnings call. This pivot comes as global EV demand shows signs of softening and executive departures continue.

The Model Y remains a bright spot in international markets, but cannot offset broader delivery declines. Tesla now appears to be betting its future on autonomous technology rather than pure EV manufacturing - a gamble that could redefine the company's valuation framework in coming quarters.