I don’t find Tesla’s quarterly reports to be especially useful, which means I don’t especially enjoy writing about them. C’est la vie.

Although overall revenue at Elon Musk’s “other” public company rose the most in nearly three years in Q2, profit missed badly, results released late Wednesday showed. Investors were also dismayed by what some called insufficient progress towards meeting this year’s capex target, even as outlays soared.

Lest we should forget what with a lineup that’s now down to just three vehicles, Tesla’s core business is cars. On that score, Q2 was pretty decent. Revenue rose 26% to a record $28.24 billion, ahead of estimates.

Recall that deliveries rose sharply YoY with the (not insignificant) caveat that Tesla was lapping easy comps: Musk spent much of H1 2025 playing at politics, an endeavor that arguably weighed on Tesla’s sales as buyers shunned the brand to protest federal layoffs.

The problem — one problem — on Wednesday evening was that Tesla’s sales boost was accompanied by lower ASPs. Margins missed badly, where “badly” means gross margin was more than 250bps short of consensus and the company’s operating margin compressed by 269bps YoY to a paper-thin 1.4%.

Bulls spun that as part and parcel of “the investment cycle,” but the bottom line (figuratively and literally) is that between price cuts, the phasing out of Tesla’s more expensive offerings and AI-related capex, profits were crimped far more than the Street expected.

As the figure shows, free cash flow was negative for the first time in nine quarters, but some expected a larger deficit.

Although capex was up dramatically (nearly 150%), Tesla’s just ~a third of the way to its full-year goal of $25 billion in outlays. So, the company’s spending too much and not enough at the same time.

Musk tried to square that circle on the call. “We should be spending on capex as fast as we can without it being too wasteful,” he mused.

The deck contained more than half a dozen references to that damn robot. “We have decommissioned the manufacturing lines for Models S and X at our Fremont Factory and are installing the first-generation lines for Optimus, where we expect to start production soon,” the company said. (Forgive me for not holding my breath.)

As for Robotaxi, it’s gonna take over the world. Just you wait another two (or two hundred) quarters. “The unsupervised operation area” for retrofitted Model Ys was expanded to Florida recently, Tesla reminded markets. “Preparation for expansion of [the] Robotaxi service to additional US metros” is ongoing.

No Tesla slide deck would be complete without a vacuous declaration about the company’s claim on leading sundry revolutions. This is the “largest and most exciting period of investment,” Tesla declared. “From here, there remains much hard work as we aim to revolutionize transportation, energy and productivity through our leading real-world AI.”

“Scaling,” Tesla went on, “will be non-linear.” Management’s “focused on long-term value creation,” and the company’s “never been more optimistic about the future.”