Tesla warned of potential rough quarters ahead due to the phaseout of federal EV tax credits and rising costs from Trump-era tariffs. During the second-quarter earnings call, CEO Elon Musk flagged the fourth quarter of 2025 and the first half of 2026 as potentially challenging, although not definitively so. Tesla said it is facing multiple challenges, including the pending expiration of the $7,500 federal EV tax credit for many of its models this quarter. Tesla said tariffs imposed by President Donald Trump raised its costs by about $300 million from the prior quarter. CFO Vaibhav Taneja noted that most of the impact was felt in the automotive business, with less effect on the energy sector. Musk remains bullish on the company's long-term profitability, citing the expected rollout of autonomy at scale in late 2026. Wedbush’s Dan Ives views the end of EV subsidies as a net positive for Tesla’s competitive positioning.
