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 said on Wednesday it has built initial versions of an affordable car, a move likely meant to stem the steep decline in sales the company has experienced in markets across the world.

Tesla revenue slipped 12% year over year in the second quarter of 2025 the company's July 23 earnings release showed. The company took in $22.5 billion in revenue, down from $25.50 billion in the second quarter of 2024. It is the company's largest revenue drop in over a decade, according to Reuters.

Tesla’s sales plunge over the last 18 months has been a stunning turn for a company that recorded only one quarterly year-over-year sales drop before 2024. And the company faces significant trouble ahead.

The first Tesla Diner opened on Monday in Los Angeles to a crowd of customers. The restaurant has Tesla chargers, a robot that serves popcorn and a drive-in movie theater. Tesla CEO Elon Musk said he plans to build more diners in the future if this location succeeds.