The fallout from Elon Musk's dive into politics a year ago is still hammering Tesla sales, as profits drop sharply in latest quarter.

Tesla’s financial position is getting worse, as the fallout continues from CEO Elon Musk’s politics. The electric automaker reported Wednesday that both revenue and profits fell in the second quarter of the year compared to a year earlier.

Shares in Tesla were down in premarket trading as the carmaker lays out the risks from President Trump’s tariffs and his scrapping of tax credits.

Tesla CEO Elon Musk warned of challenges after the EV maker saw a 12% revenue drop to $22.5 billion in Q2, marking its worst quarter in years. The decline stemmed from lower vehicle deliveries and regulatory credit revenue,

Tesla reported second-quarter results after Wednesday's closing bell, unveiling profits and sales in line with Wall Street expectations. Losses mounted for the stock, however, as the company's call with analysts sowed more doubts than offered answers about Tesla's prospects and Chief Executive Elon Musk said he could see potential for "a few rough quarters" ahead.

The CEO is already eyeing expansion for his Tesla Diner dishing merchandise and food served by Optimus robots.

Musk said that half the US population could have access to a Tesla robotaxi by the end of 2025. That’s a huge leap from the company’s current limited rollout.

LOS ANGELES (Reuters) -Tesla and its CEO Elon Musk are walking an increasingly difficult tightrope as the company navigates declining electric vehicle sales and an autonomous driving business that has yet to get off the ground.