Tesla reported weaker-than-expected second-quarter earnings, with adjusted earnings per share of 33 cents against an expected 51 cents, though revenue surpassed estimates at $28.24 billion. The company's stock saw a decline in extended trading.

Net income fell 5% year-over-year to $1.11 billion. While automotive revenue increased 23% to $20.52 billion, the gross margin for the core segment slid to 16.8%, missing analyst expectations of 19.4%. This dip was attributed to lower average selling prices and reduced regulatory credit revenue, as Tesla shifted to selling lower-cost Model 3 and Y vehicles.

Operating expenses climbed 47% to $4.35 billion, impacting the operating margin, which plunged to 1.4%. Notably, Tesla's free cash flow turned negative, reaching a deficit of $1.1 billion, a significant shift from the positive cash flow in previous periods. Capital expenditures also surged 142% to $5.79 billion.