Tesla shares dropped more than 8% following the release of a quarterly report showing a decline in profits, accompanied by a warning from CEO Elon Musk that more “difficult” quarters lie ahead for the company, AFP reported.

As of 14:15 GMT, Tesla shares were trading at $304.15, down 8.4%. For the second quarter, the company reported a profit of $1.2 billion — a 16% decrease compared to the same period last year. This marks the third consecutive quarter of declining profits.

During a conference call with investors, Musk hinted that the weak results are likely to continue or even worsen in the short term as Tesla moves toward monetizing its future autonomous transportation projects.

Sales are expected to shrink further following the expiration of the $7,500 federal tax credit for electric vehicle purchases. The measure is set to expire on September 30 under legislation signed by President Donald Trump.

“We may have a few more tough quarters ahead,” Musk said, but added that Tesla’s business model will become “extremely attractive” once its autonomous transportation operations reach scale.

Musk donated over $270 million to Trump’s successful 2024 presidential campaign, yet tensions between the two have emerged, particularly over the administration’s extensive fiscal package. Trump even raised the possibility of Musk being deported following previous public disputes between them.

Subsequently, the president appeared to attempt to smooth relations, posting on social media that he had no intention of “destroying” Musk’s business by removing subsidies.

“I want Elon and all companies in our country to THRIVE — stronger than ever! The better they do, the better for the USA — and that’s good for all of us,” Trump wrote. | BGNES