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Tesla Is in Deeper Trouble than You Think

TRAVIS COUNTY, TEXAS, JUL 7 – Tesla's revenue from regulatory credits, which contributed $10.6 billion since 2019, faces a $255 million quarterly loss amid federal policy changes removing EV tax credits.

  • Tesla is facing major hurdles as its global sales dropped by 13% in both the first and second quarters of this year, reflecting a deteriorating financial outlook.
  • These declines stem from increased competition from Western and Chinese automakers, expiration of the $7,500 EV tax credit on October 1, and negative impacts from Elon Musk's political activity.
  • Musk's political involvement and creation of a new political party distracted investors, triggered protests outside Tesla showrooms, and led analysts to urge limiting his political pursuits.
  • William Blair downgraded Tesla to market perform with reduced earnings forecasts, while analyst Dan Ives maintained a buy rating and $500 price target but highlighted Musk's alienation of stakeholders.
  • The loss of tax credits and worsening market share suggest Tesla may return to losses despite Musk's assurances that future growth depends on robots and self-driving taxis.
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Tesla's troubles go far beyond the recent clash between CEO Elon Musk and President Donald Trump, who accused the former "first friend" of "losing control" in a heated social media spat last weekend.

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sherwood.news broke the news in on Monday, July 7, 2025.
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