Tesla's profits fell 16% over a three-month period ending in June that overlapped with the end of chief executive Elon Musk's tenure in the White House and his ensuing public clash with President Donald Trump, an earnings release on Wednesday showed.
The company's performance fell short of analysts' expectations.
Total revenue decreased by 12% from one year earlier, to $22.4 billion, while revenue derived from car sales dropped 16% over the second quarter of 2025 compared to a year ago, the earnings showed.
The fresh data covered a period following the onset of Trump's auto tariffs in early April.
MORE: What to know about Trump's Aug. 1 tariff deadlineIn a statement on Wednesday, Tesla touted a "strong balance sheet," but acknowledged a "sustained uncertain macroeconomic environment resulting from shifting tariffs."
The company also faces "unclear impacts from changes to fiscal policy and political sentiment," Tesla said.
The losses marked the second consecutive quarterly revenue drop for the company.
Musk's position at the White House, which ended in May, set off demonstrations at Tesla dealerships worldwide in protest of his effort to slash government spending as leader of the Department of Government Efficiency.
After Musk stepped away from the federal government, he sharply criticized Trump and stridently opposed Republicans' signature spending legislation. Recently, Musk has continued to slam the Trump administration over its handling of documents related to disgraced financier and convicted sex offender Jeffrey Epstein.
Earlier this month, Musk floated plans to launch a political party.
On an earnings call with analysts after the second quarter results were released, Musk fielded a question about his control of the company, which a Morgan Stanley analyst said was 13%.
"As I mentioned before, I think my control of Tesla should be enough to ensure that it goes in a good direction, but not so much control that I can't be thrown out if I go crazy," Musk said in jest.
The analyst responded, "That's a great one. Okay, Elon, you're not going to go crazy. We trust you. You can stay a little crazy. A little crazy is okay."
MORE: Trump admin live updates: Rubio announces investigation into Harvard's eligibility for Exchange Visitor ProgramAlso on the call, Musk unveiled a new initiative for the carmaker he said will help with affordability -- the ability to rent out your Tesla to the fleet.
Likening the forthcoming offering to Airbnb but for renting Teslas, Musk said, "It will be a very big deal when people can release their car to the fleet and have it earn money for them."
Meanwhile, Tesla has faced heightened competition from domestic and foreign carmakers rolling out electric vehicles. Chinese EV-maker BYD outperformed Tesla in total car sales for the first time ever last year.
As car sales have slowed, Musk has touted a future autonomous car service, dubbed robotaxis, as a growth area for the business. Last month, Tesla launched a limited version of the self-driving taxi service in Austin, Texas.
The rollout marked a milestone for the company's self-driving taxi aspirations, but limitations placed on the vehicles and a series of apparent miscues suggest the technology remains far from wide adoption, some analysts previously told ABC News.
ABC News' Soon Youn and Jess O’Callaghan contributed to this report.