Tesla Inc.’s shares tumbled more than 8% in premarket trading on Thursday, as investors digested a sobering earnings report and CEO Elon Musk’s candid warnings about potential headwinds.

During the company’s second-quarter earnings call, Musk abandoned Tesla’s previously stated goal of 20% to 30% sales growth for 2025, citing uncertainties including the elimination of federal electric-vehicle tax credits under the new administration. This shift comes amid a broader slowdown in EV demand, with Tesla reporting a 12% year-over-year revenue decline to $22.5 billion, missing analyst expectations.

Musk, known for his optimistic projections, struck a more cautious tone, predicting “a few rough quarters” ahead due to margin pressures and competitive dynamics. The company also highlighted risks from President Trump’s proposed tariffs on imported vehicles and components, which could inflate costs for Tesla’s supply chain. Net income slid to $1.17 billion, exacerbated by a halving of carbon-credit revenue and a second consecutive quarter of falling car sales.

Navigating Policy Shifts and Market Realities

Analysts point to the scrapping of EV incentives as a pivotal blow, with Musk noting during the call that this could dampen consumer adoption in the near term. According to a report in The New York Times, Tesla’s leadership is bracing for volatility as it pivots toward autonomous technologies, even as core automotive revenues dropped 20% in the quarter. Posts on X, formerly Twitter, reflect a mix of investor sentiment, with some users highlighting the stock’s 41% decline year-to-date and others speculating on a rebound tied to long-term bets like robotaxis.

Despite the gloom, Tesla reaffirmed plans for a more affordable model slated for production in the second half of 2025, though details remain sparse. The earnings miss follows a pattern of underperformance, with income plunging 71% year-over-year, as detailed in coverage from Yahoo Finance. Musk emphasized the company’s month-old robotaxi service, which has accumulated just 7,000 driverless miles, as a potential growth engine, but skeptics question its readiness amid regulatory hurdles.

The Robotaxi Gamble Amid Earnings Woes

Fortune’s analysis underscores how the earnings call was “long on promises and short on specifics,” particularly around the robotaxi initiative, which Musk envisions scaling by 2026. As reported in Fortune, this focus shift arrives as Tesla grapples with its weakest quarter in over a decade, including a 13% drop in deliveries. Industry insiders note that while autonomous driving could redefine Tesla’s valuation—potentially justifying its premium multiple—the immediate outlook hinges on stabilizing EV sales in a tariff-laden environment.

Competitors like Ford and General Motors are also feeling the pinch from policy changes, but Tesla’s heavy reliance on incentives amplifies its vulnerability. Musk warned that fourth-quarter results might be particularly challenging, a sentiment echoed in The Manila Times, which tied the profit drop directly to Trump’s fiscal package. For now, Tesla’s strategy appears to bank on technological leaps to offset these “rough” periods, but Wall Street’s reaction suggests growing impatience with vague timelines.

Investor Sentiment and Long-Term Bets

Broader market data from sources like ZeroHedge shows Tesla’s option scores dipping as conviction wanes, with shares down sharply post-earnings. Yet, some X posts express optimism about a midterm rally, citing historical bounces from key support levels. As Tesla navigates this turbulence, insiders are watching whether Musk’s vision for self-driving fleets can restore momentum, or if persistent sales slumps will force deeper cost cuts. The coming quarters will test the company’s resilience in an evolving regulatory and economic climate.