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Or sign-in if you have an account.A Tesla Inc. dealership in Alhambra, California. Photo by Mario Tama/Getty Images filesTesla Inc. missed Wall Street’s profit expectations even after a strong quarter of auto sales, a setback for the electric-vehicle maker as it looks to build out new lines of business in robotics, autonomy and AI.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountorAdjusted earnings were 33 cents a share in the second quarter, the company said Wednesday in a statement. That was well short of the 51-cent average of analyst estimates compiled by Bloomberg. It also reported its first quarter of negative free cash flow in more than two years, burning through US$1.09 billion.Tesla chief executive Elon Musk has warned spending this year will total more than US$25 billion, and the company is looking to increase production of cars, batteries and robots across half a dozen plants as it follows his futuristic vision. The impact of that investment is now filtering through the company’s financials, so investors will want more details.Canada's best source for investing news, analysis and insight.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Investor will soon be in your inbox.We encountered an issue signing you up. Please try againTesla reported capital expenditures of US$5.8 billion in the quarter. At that pace, Tesla would spend about US$17 billion this year — well below the company’s target. This puts the EV maker in a bind as it tries to hit the ambitious targets it has promised to investors.“Tesla is one of the few companies that should be spending more on AI, spending less for them is puzzling given how much their future is anchored on AI adoption into every part of their business,” said Max Gokhman, head of AI and digital asset solutions at Franklin Templeton.Its shares plunged as much as 14 per cent after the markets opened Thursday in New York, the biggest intraday decline since June 2025. The stock had declined 17 per cent so far this year through Wednesday’s close.Profit was impacted by lower average vehicle selling prices, while operating costs surged 47 per cent to US$4.35 billion. Tesla also reported a decline in revenue from regulatory credits, which are payments it receives from other automakers that exceed emissions standards. That revenue stream has dwindled as U.S. President Donald Trump backs away from clean-energy goals laid out under his predecessor.Revenue was US$28.2 billion in the quarter, beating market expectations. Earlier this month, Tesla reported it sold more than 480,000 vehicles in the second quarter, well above expectations. Cars remain Tesla’s most important business, while robotaxis and other projects still aren’t generating meaningful revenue.Subscriptions for Full Self-Driving software rose to nearly 1.5 million, an increase of 56 per cent from a year earlier and a continuation of an upward trend.The EV maker didn’t disclose new information about its nascent robotaxi ride-hailing business, which recently expanded to Miami, Orlando and Tampa after launching in Texas cities. Tesla also offers rideshare service under the same app in the San Francisco Bay Area, but the service is more akin to Uber and Lyft.The robotaxi rollout has been slower than expected, sparking concern around Tesla’s ability to scale the service and compete with market leader Waymo. Tesla had previously projected it would launch robotaxis in Phoenix and Las Vegas as early as the first half of 2026, but on Wednesday said preparations are still underway in the cities.The market is still waiting for key details such as the number of vehicles in use and the total miles of driverless service without a human safety monitor in the car.The quarter included a significant milestone for another major Musk-run company when Space Exploration Technologies Corp. went public in a record-setting offering. The rocket-launch company raised tens of billions of dollars in the process on a wave of investor hype, turning Musk into the world’s first trillionaire, albeit briefly. SpaceX shares have declined in recent weeks, pulling Musk’s wealth down with them.There has been widespread speculation among investors that Tesla and SpaceX could merge in the near future thanks to shared ambitions in artificial intelligence.SpaceX already acquired Musk’s artificial intelligence company, xAI, now SpaceXAI, in February. And SpaceX and Tesla already do business together: Tesla sells megapack batteries and Cybertrucks to SpaceX, while the AI chatbot Grok is available in some Tesla vehicles.—With assistance from Jordan Fitzgerald. Join the Conversation This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.