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Tesla just put up its biggest quarter on the top line and one of its thinnest on the bottom line. The whole shareholder deck is here, and the earnings call replay is on YouTube.

Here are all my highlights for you:

Tesla posted record quarterly revenue of $28.2 billion, up 26% year over year. Operating income fell 57% to $398 million.

Gross margin landed at 16.8%, and non-GAAP EPS came in at $0.33, under the $0.55 of analysts consensus. That’s the main part that caused $TSLA stock to tumble.

I’m even slightly surprised I can say this in our newsletter, but… Tesla has again dropped to a valuation of one trillion dollars as of now:

The quarter also pushed Tesla past $100 billion of revenue on a trailing-twelve-month basis. Another company first.

What squeezed the profit?

Capital expenditure more than doubled to a record $5.8 billion.

Operating expenses climbed 47% on AI projects and stock-based comp. Regulatory-credit revenue nearly vanished. Free cash flow turned negative at $1.1 billion, the first negative quarter since early 2024. But we already knew this was coming.

One number the CFO wanted noticed as he called it out in the Q&A:

Tesla closed the quarter with its largest vehicle order backlog since 2023!

Capex hit a record $5.8 billion, up 142% year over year and $3.3 billion higher than a single quarter earlier. The CFO held full-year guidance above $25 billion, said the second half runs higher still, and expects the spend to keep climbing for the next two or three years.

To fund it, Tesla is arranging debt facilities that give it room to borrow up to $30 billion.

Where the money lands:

For scale: a year ago the number was $2.4 billion a quarter. Tesla now calls this its largest and most exciting period of investment. Elon said it might be one of the largest industrial projects of all time, perhaps similar to Henry Ford’s.

The Q2 deck lists Cybercab capacity at Gigafactory Texas at over 125,000 units a year. That is the first hard number Tesla has put on the line. In the Q1 deck the same line read “Pilot Production” with no figure. One quarter on, it reads “Production.”

A line built for 125,000-plus units a year works out to more than 340 Cybercabs a day at full rate. Of course, the line is not ramped up to that level yet, and we’ve seen perhaps 300ish Cybercabs out there on the lots total so far.

Paid Robotaxi rides have covered 2.4 million miles (about 3.9 million km) through the end of June. The curve flattened a little late in the quarter, which Tesla puts down to a cautious approach on scaling.

What’s more interesting, though, is Ashok said on the call that Tesla has completed 309,000 of those miles as unsupervised.

More than 55% of new deliveries in North America now ship with an FSD subscription, a record attach rate. Active subscriptions reached 1.48 million, up 56% from 950,000 a year ago, with record net additions.

That headline figure blends monthly subscribers with owners who bought FSD outright: around 666,000 pay monthly, and monthly FSD subscription revenue now runs near $66 million, close to $790 million a year.

Energy generation and storage brought in $3.14 billion (+13%) on 13.5 GWh deployed (+41%). That is the second-highest deployment quarter on record, behind only Q4 2025 at 14.2 GWh. Gross profit set a record at $648 million on a 14% margin.

Megafactory Shanghai is ramping, and Megafactory Texas is on track for Megapack 3 and Megablock output sometime soon.

Tesla has retired the Model S and X lines at the Fremont Factory, and the first-generation Optimus production lines are going into that same floor space.

Optimus output is expected to start in 2026, with the first units going to an internal Optimus Academy for training-data collection.

As of Q2, per the shareholder deck:

Elon said Tesla will point its self-driving work at the self-driving Semi around the end of this year or early next, once the passenger fleet needs less of the team's focus.

"It makes sense for us to focus our self-driving efforts on our high-volume vehicles, so Model 3 and Y. And solving self-driving and really getting to the point where it's a generalized, unsupervised self-driving for those vehicles. Probably around the end of this year or early next year. And I just don't want it to be a distraction on the March of Nines of self-driving. And it will be in time for the scale-up to high production of the Semi."
— Elon Musk, Q2 2026 earnings call

He called an autonomous Semi very important for the trucker shortage, while noting Semi volumes stay too small a slice of the fleet this year to justify splitting the effort now.

I always felt Elon was sandbagging the autonomous Semi future a little bit, and I think it’s not to anger the industry and make it look like the Semi will come to take the truckers’ jobs.

Tesla started rolling out its 2026 Summer Update, one of the bigger feature drops of the year. Here’s briefly what’s in it:

Some smaller but still notable updates:

🇺🇸 Tesla's lithium refinery near Robstown, Texas is now fully operational, with battery materials already being shipped to Giga Texas for 4680 cell production.

The milestone was announced during Lithium Day 2026, an event held at the refinery last week that brought together Tesla executives, employees and local officials to showcase the facility and discuss the company's growing battery materials business.

🇺🇸 Tesla VP of AI Software Ashok Elluswamy signaled that FSD V14 Lite for Hardware 3 is likely headed for a wide rollout, and the build (2026.20.6.10) has now started moving beyond the early-access group to HW3 owners in the US and Canada.

🇺🇸 Tesla's FSD safety page posted fresh figures.

On FSD (Supervised), the fleet now logs one major collision every 5.69 million miles, about 7x fewer than a Tesla driven with no active safety features, and roughly 8x better than the US average. Miles per major collision:

Tesla also shared a new clip of FSD steering clear of would-be collisions.

🇺🇸 Tesla opened its first public Megacharger station for the Semi, giving fleet customers access to dedicated high-power charging as it expands its commercial trucking network.

The Bloomington, California site, about an hour east of Los Angeles, has six Megacharger stalls capable of up to 1.2 MW (1,200 kW) of peak power each, and it is open to all Tesla Semi customers. It sits in San Bernardino County, one of the busiest freight corridors in the country.