Tesla faces a potentially difficult period, according to Elon Musk, following the release of a financial report indicating a significant downturn in the second quarter. The company’s performance has been impacted by several factors, including declining government subsidies for electric vehicles, delays in the rollout of self-driving technology, and increasing competition.

The second-quarter report revealed a 12% decrease in revenue, totaling $22.5 billion, and a profit of $1.2 billion. This follows a less-than-stellar first quarter, adding to investor concerns about the company’s current trajectory.

Musk acknowledged the challenges, stating that Tesla might not achieve a “convincing economy” until late 2026 due to the time required to develop and implement self-driving technology. He cautioned investors about potential “tough quarters” ahead as the company navigates these obstacles and invests in robotics and autonomous driving.

The stock market reacted swiftly to Musk’s statements, with Tesla’s stock price falling 5.3% on the New York Stock Exchange after the market closed. This decline further compounds an 18% drop in the stock’s value year-to-date.

Tesla’s traditional car production business is facing increasing competition and the ramifications of Musk’s political involvement. Investors are pinning their hopes on Musk’s vision for the future, which centers on artificial intelligence, robots, and self-driving technology.

In Denmark, Tesla has experienced challenges in sales. While the new Model Y entered the top ten of popular passenger cars in May, the company was previously pushed out of the top ten in April. Although the Model Y has shown promise, it is not enough to offset the company’s overall quarterly performance.