We’ve closely covered Tesla’s sales decline, and we’ve discussed the potential for an ongoing sales decline at length. Naturally, a continued decline in sales could significantly hurt Tesla’s finances. Also, it’s hard — or impossible — to justify the company’s market cap if the company isn’t going to return to fast, or hyperfast, growth.
Perhaps we’ll write more about Tesla’s sales and financial trends now that the company’s Q2 2025 shareholder letter is out, but given that we’ve written about that so much, it was actually three potential positive notes from the shareholder letter that caught my eye. Are they a sign of life, hope, and potential for Tesla? Or are they more of a shiny object and distraction? Well, let’s get to what these three positives are and I’ll let you decide — I don’t know.
1. First Builds of Affordable Tesla Model in June
A new, more affordable Tesla model was supposed to go into production in June, a missed milestone that we covered a couple of times recently. However, the company did note in the shareholder letter that first builds of the model were created in June. Additionally, Tesla is planning on volume production of the model in the second half of 2025.
So, even though things are a bit behind schedule, it doesn’t look like a big miss and it seems we can expect this new model to come out in coming months. Of course, we don’t know any real details around this more affordable model, and there are still questions about how much it will boost sales versus take sales from the Model 3 and Model Y, but this product expansion is a key thing critics and fans have been calling for, so it’s a good sign that this is still more or less on track.
2. Volume Production of Semi
The Tesla Semi was the Tesla product I was most excited about … for years … and years. Unfortunately, mass production has taken far longer to arrive than I and others hoped and expected. It’s so far behind schedule that I think most of us forget about it and write it off. However, Tesla noted prominently in its quarterly letter that development of the Semi (and Cybercab) has been continuing and volume production is planned for next year (for both the Semi and the Cybercab).
3. Energy Storage Business Doing Quite Well
While vehicle sales have drooped, many Tesla investors have been keen to point out that the company’s energy storage business has been growing strongly. And it has. Tesla notes that “Trailing twelve-month Energy storage deployments achieved their
12th consecutive quarterly record.” One of the company’s few financial pros in the 2nd quarter was “growth in Energy Generation and Storage gross profit.”
That said … growth in this segment did clearly slow down. If you look at the chart below and pay attention to how the bars were growing quarter after quarter, Q2 2025 stands out for almost leveling off rather than seeing similar growth to other quarters.
But back to the positives, the good thing is that Tesla recognizes this as a massive need and is trying to make the most out of its battery skills. In the shareholder update, Tesla wrote “The Energy business is more critical than ever. The availability of clean, reliable energy is necessary for economic growth and an imperative for the development and commercialization of AI enabled products and services. As electricity demand grows, our Megapack product helps to increase utilization of existing generation and transmission capacity, resulting in a more efficient use of the electric grid. When paired with solar PV, Megapack is cost competitive with traditional fossil fuel generation assets and can be deployed 4x faster than traditional fossil fuel plants of the same capacity. Trailing twelve-month Energy storage deployments achieved their 12th consecutive quarterly record.”
Indeed.
Any other matters — positive or negative — that you think stand out from this quarter’s shareholder update from Tesla?
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