Tesla watchers warn that major struggle lies ahead for Elon Musk's company: 'Dramatically different'

Tesla continues to set records for all the wrong reasons.

What's happening?

The company's second-quarter revenue dropped 12% to $22.5 billion, its biggest decline in over 10 years, Forbes reported July 23 via Reuters. Vehicle deliveries slid 13% year over year, marking a second straight new low.

Tesla's net income was down 16%, and it lost almost $600 million in regulatory credit sales.

Wedbush Securities analyst Dan Ives called it a "dramatically different [scenario] than three months ago" and said investors would look to the company's artificial intelligence initiatives and potential investment in xAI, per Forbes.

Why is this important?

If the electric vehicle giant continues this trend, it may have to complete the pivot to autonomous services and robotics that CEO Elon Musk has long floated. Characteristically, these musings have not been based in reality.

As Forbes noted, he said a Tesla-backed ride-hailing platform would be available to hundreds of millions of Americans by the end of 2025. A limited rollout of Robotaxis in Austin, Texas, however, has produced ignominy due to dangerous and bizarre maneuvers.

While no one is being forced into self-driving cabs, the poor performance is seemingly hurting Tesla's brand. Plummeting sales could impede the general public's adoption of EVs, a necessary step in the transition from dirty energy sources.

Industries that rely on this power, which pollutes the atmosphere with heat-trapping gases, are driving rising global temperatures. Among the consequences are more frequent and severe extreme weather events that are wreaking havoc on the homeowners insurance market.

What's being done about Tesla's slump?

As noted, Musk may be using the sales slowdown as an opportunity to transition the company toward other endeavors. Tesla stock is down for the year but has bounced back from nadirs in March and April.

While this signals confidence, a proposed class-action lawsuit was filed against Musk and Tesla on Aug. 4 by shareholders who alleged securities fraud, Reuters reported. It's the latest in a line of legal and investigatory obstacles that could make it difficult for the company to fully recover.

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