Tesla (TSLA) released its financial results and shareholders’ letter for the second quarter (Q2) 2026 after market close today. We are updating this post with all the details from the financial results, shareholders’ letter, and the conference call later tonight.
The earnings call with management is scheduled for 5:30 p.m. ET.
Tesla Q2 2026 earnings expectations
Coming into the report, Wall Street consensus called for revenue of about $26.4 billion, with the Estimize crowd a touch lower at roughly $25.9 billion — up from $22.5 billion in Q2 2025, or growth somewhere in the 15 to 17% range. It would be Tesla’s first real revenue growth in over a year.
On the bottom line, analysts expected non-GAAP earnings of about $0.53 per share, up from $0.40 a year ago, with Estimize at $0.52. The spread was unusually wide on both lines, a sign nobody agreed on how much Tesla had to discount to move a record number of cars.
The setup: Tesla already told us it delivered 480,126 vehicles in Q2, up 25% year-over-year and its best second quarter ever, while producing 451,758. It also deployed 13.5 GWh of energy storage, up more than 40% from a year ago. The volume was never in question. The profit was. For the full setup, see our Q2 2026 earnings preview.
Tesla Q2 2026 financial results
After the market closed today, Tesla released its financial results for the second quarter and confirmed a record $28.24 billion in revenue, up 26% from a year ago and comfortably ahead of the roughly $26.4 billion Wall Street expected. But it missed badly on profit: non-GAAP earnings came in at just $0.33 per share, well short of the $0.53 analysts were looking for and down 18% year-over-year.
It’s a strange split. Record 480,126 deliveries, a 50% jump in services revenue, and continued energy growth pushed the top line to an all-time high — Tesla’s first real revenue growth in more than a year, and enough to top $100 billion in trailing-twelve-month revenue for the first time. Almost none of it reached the bottom line.
Gross margin held up better than feared. Total gross margin was 16.8%, down just 41 basis points from a year ago, even as Tesla sold a record number of cars. So this wasn’t the discount-driven margin collapse many expected from a record-volume quarter.
The damage was below the gross-margin line. Operating income fell 57% to $398 million, and operating margin sank to 1.4% from 4.1% a year ago. Operating expenses jumped 47% to $4.35 billion as Tesla spent heavily on AI, the Optimus robot, and robotaxi, plus stock-based compensation tied to the 2025 CEO pay package. A collapse in regulatory credits, more on that below, took away another chunk of easy profit.
Capital spending more than doubled to $5.8 billion, pushing free cash flow to negative $1.1 billion, Tesla’s first cash-burning quarter since early 2024. GAAP net income of $1.11 billion was down just 5%, but it leaned on a $590 million gain in other income, which includes mark-to-market gains on Tesla’s bitcoin holdings and currency effects. The trend underneath is the real story: record revenue, shrinking profit.
| Metric | Q2 2026 | Q2 2025 | Consensus |
|---|---|---|---|
| Revenue | $28.24B | $22.5B | ~$26.4B |
| Total gross margin | 16.8% | 17.2% | — |
| Operating income | $398M | $923M | — |
| Operating margin | 1.4% | 4.1% | — |
| Non-GAAP EPS | $0.33 | $0.40 | ~$0.53 |
| GAAP net income | $1.11B | $1.17B | — |
| Free cash flow | –$1.09B | $0.15B | — |
| Regulatory credits | $146M | $439M | — |
| Energy storage deployed | 13.5 GWh | 9.6 GWh | ~13.8 GWh |
Tesla’s regulatory credits collapse
The clearest driver of that shrinking profit is regulatory credits. Tesla booked just $146 million in credit revenue in Q2, down 67% from $439 million a year ago and less than half the $380 million it reported in Q1. It’s the lowest in years. And because credits cost Tesla almost nothing to produce, that’s near-pure profit walking out the door.
This is the drop-off we’ve been flagging. Credit sales peaked at a record $2.76 billion in 2024, then fell 28% to $1.99 billion in 2025, sliding quarter by quarter: $595 million in Q1 2025, $439 million in Q2, $417 million in Q3, $542 million in Q4. Now they’ve fallen off a cliff. A year ago, credits added almost two full points to Tesla’s gross margin. This quarter, at $146 million, they added barely half a point.
The cause is policy. The $7,500 federal EV tax credit expired on September 30, 2025, and a change in federal law zeroed out the penalties automakers pay for missing fuel-economy standards, which was the whole reason rivals bought Tesla’s credits. With that market gone, this line isn’t coming back, and Q2 is the first clean look at Tesla’s margins without it.
Tesla Q2 2026 shareholder deck
Tesla’s full Q2 2026 shareholder deck is available on the company’s investor relations site, and management will discuss the results on the earnings call at 5:30 p.m. ET.
More from Tesla’s Q2 2026 earnings
This is a developing story. We’ll add the most important updates from Tesla’s shareholder letter and earnings call here as they come.
You can watch the earnings call here starting at 5:30 PM:
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