01—Abstract
Summary
Summary of the 10-Q filed July 23, 2026. Cited figures are marked; the original filing is the authoritative source.
Tesla, Inc. reported its financial results for the second quarter and the first half of 2026.
Total revenues reached $28.24 billiona for the quarter, an increase of 26% year-over-year, and $50.62 billion for the first half, up 21% year-over-year. This growth was primarily driven by a significant increase in automotive sales, up 27% for the quarter and 24% for the first half, fueled by higher vehicle deliveries and a favorable average selling price. The Services and other segment also showed strong performance, with revenue increasing by 50% year-over-year for the quarter.
Despite top-line growth, net income attributable to common stockholders saw a slight decrease of $58 million to $1.11 billionb in the second quarter compared to the prior year, although it saw a modest increase of $10 million to $1.59 billion for the first half. This is attributed to increased operating expenses, particularly in Research and Development (R&D) and Selling, General, and Administrative (SG&A) costs, which saw substantial increases of 49% and 45% respectively for the quarter. The company continues to invest heavily in AI initiatives, including compute infrastructure and data centers, as well as manufacturing expansion, with expected capital expenditures exceeding $25 billion in 2026.
02—Key points
Key Highlights
- Total revenues for Q2 2026 were $28.24 billion, a 26% increase compared to Q2 2025.
- Net income attributable to common stockholders was $1.11 billion for Q2 2026, a slight decrease from $1.17 billion in Q2 2025.
- Automotive sales revenue increased by 27% year-over-year in Q2 2026, driven by higher vehicle deliveries and average selling prices.
- R&D expenses surged by 49% year-over-year in Q2 2026, primarily due to increased investments in AI and other programs.
- SG&A expenses rose by 45% year-over-year in Q2 2026, largely influenced by stock-based compensation related to the 2025 CEO Performance Award and increased employee costs.
- Capital expenditures were substantial, with over $8.28 billion in the first half of 2026, and the company anticipates exceeding $25 billion in capital expenditures for the full year 2026, driven by AI initiatives and manufacturing expansion.
- The company released $274 million of its valuation allowance on California deferred tax assets, resulting in a significant income tax benefit and a lower effective tax rate of 15% for the quarter.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2026, Tesla, Inc. kept $0.04.
- Revenue$28.24B100.0%
- Cost of revenue−$23.48B83.2%
- Gross profit$4.75B16.8%
- Operating costs−$4.35B15.4%
- Operating income$398.0M1.4%
- Interest, other & tax$716.0M2.5%
- Net income$1.11B3.9%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2026filed July 23, 2026Financial Statements
Q2 FY2026 against Q2 FY2025
| Line item | Q2 FY2026Q2 FY2025 | Change |
|---|---|---|
| Revenue | $28.24B$22.50B | +25.5% |
| Cost of Revenue | $23.48B$18.62B | +26.1% |
| Gross Profit | $4.75B$3.88B | +22.5% |
| R&D Expenses | $2.37B$1.59B | +49.2% |
| SG&A Expenses | $1.98B$1.37B | +45.1% |
| Operating Expenses | $4.35B$2.96B | +47.3% |
| Operating Income | $398.00M$923.00M | −56.9% |
| Net Income | $1.11B$1.17B | −4.9% |
| EPS (Basic) | $0.34$0.36 | −5.6% |
| EPS (Diluted) | $0.32$0.33 | −3.0% |
| Shares Outstanding (Basic) | 3.24B3.22B | +0.4% |
| Shares Outstanding (Diluted) | 3.54B3.52B | +0.6% |
05—Questions
Frequently Asked Questions
What was the primary driver of Tesla's revenue growth in Q2 2026?
The primary driver of Tesla's revenue growth in Q2 2026 was a significant increase in automotive sales, which rose by 27% year-over-year. This was fueled by a 25% increase in vehicle deliveries and a higher average selling price, partly due to sales mix and favorable foreign currency exchange rates.
Why did net income decrease in Q2 2026 despite strong revenue growth?
Despite strong revenue growth, net income attributable to common stockholders decreased slightly in Q2 2026 due to substantial increases in operating expenses. Research and Development (R&D) expenses rose by 49% and Selling, General, and Administrative (SG&A) expenses increased by 45% year-over-year. These increases were driven by significant investments in AI initiatives, stock-based compensation, and higher employee and operational costs.
What is Tesla's outlook on capital expenditures and investments?
Tesla anticipates capital expenditures to exceed $25 billion in 2026, a significant increase from the $3.89 billion spent in the first half of 2025 and $8.28 billion in the first half of 2026. These investments are primarily focused on AI initiatives, including compute infrastructure and data centers, as well as expanding manufacturing capabilities and AI-enabled assets.
How did the release of the valuation allowance on deferred tax assets impact Tesla's financial results?
In Q2 2026, Tesla released $274 million of its valuation allowance on California deferred tax assets. This release, along with other tax adjustments, resulted in a significant income tax benefit and a lower effective tax rate of 15% for the quarter, positively impacting net income.
06—Continue