Tesla confronts market realities.

On Tuesday, Tesla and its board received another market lesson: earnings and revenue matter more than off-the-cuff ideas and products like robotaxis and Cybertrucks.

These innovations have their place, but Tesla is falling behind the competition each quarter, especially in its crucial market, China. Instead of developing a new, cheaper Tesla model, Musk has been promoting the Robotaxi, now called the CyberCab, which is slated for a PR launch next month.

The large and unwieldy Cybertruck is claimed to be selling well and is projected to become profitable by the end of this year—a claim not yet supported by figures.

Tesla’s second-quarter sales might have exceeded analysts’ expectations, but they were still weak compared to the company’s previous performances. Despite this, investors and industry enthusiasts initially pushed the stock higher until a reality check came before the second-quarter figures were released.

This pause was well-timed, as the weak quarter’s revenue from car sales and a slump in earnings were revealed. Revenue in the June quarter rose to $25.5 billion from $24.93 billion a year ago, surpassing market forecasts of $24.77 billion.

However, the core business of selling EVs saw sales revenue drop 7% to $19.9 billion from $21.27 billion in the same quarter a year ago. Auto sales included regulatory credits of $890 million, more than triple the amount from last year, making the figures appear healthier.

Tesla reported “record regulatory credit revenues in Q2,” highlighting that other automakers are “still behind on meeting emissions requirements.”

The weak results, particularly a 45% drop in net profit, caused the shares to fall 3.3% in after-hours trading, adding to the 2.3% decline in regular trading. This marked the fourth consecutive quarterly earnings decline, an achievement the company did not highlight on Tuesday.