The fallout from Elon Musk’s plunge into US politics is still hammering his Tesla business as sales and profits plunged further in recent months.

The car company said revenue dropped 12 per cent and profits slumped 16 per cent in the three months to June as buyers continued to stay away.

“The perception of Elon Musk, its chief executive, has rubbed the sheen right out of what once was a darling and soaring automotive brand,” wrote Forrester analyst Dipanjan Chatterjee in an email.

Tesla is “a toxic brand that is inseparable from its leader”.

Quarterly profits at the electric vehicle, battery and robotics company fell to $US1.17 billion ($A1.78 billion), or 33 cents a share, from $1.4 billion ($A2.13 billion), or 40 cents a share. It is the third quarter in a row that profit has dropped.

Revenue fell from $25.5 billion to $22.5 billion in the April through June period, slightly above Wall Street’s forecast.

Tesla shares fell 3 per cent in after-hours trading.

Musk spent the company’s earnings conference call talking less about car sales and more about robotaxis, automated driving software and robotics, which he said were the future of the company. But those businesses are yet to take off, and the gap between promise and profit was apparent in the second quarter.

As well as his role in the Trump administration, the Tesla chief alienated potential buyers in Europe by embracing far-right candidates for office. Rival electric vehicle makers such as China’s BYD and German’s Volkswagen have pounced on the weakness, stealing market share.

Tesla has begun to rollout its paid pickup robotaxi service in Austin, Texas, and hopes to introduce the driverless cabs in several other cities soon.

In the post-earnings call, Musk said the service would be available to probably “half of the population of the US by the end of the year — that’s at least our goal, subject to regulatory approvals”.

With autonomous taxis, though, the billionaire who upended the space race and EV manufacturing faces tough competition. The dominant provider now, Waymo, is already in several US cities and recently logged its ten-millionth paid trip.

Meanwhile other threats loom. The new federal budget just passed by the US Congress eliminates a credit worth as much as $US7500 ($A11,400) for buying an electric car. It also wipes out penalties for car makers on exceeding carbon emission standards. That threatens Tesla’s business of selling its “carbon credits” to traditional car companies that regularly fall short of emission standards.

“We’re in this weird transition period where we’ll lose a lot of incentives in the US,” Musk said, predicting rough months ahead, possibly until June next year.

The company is speeding up the introduction of a cheaper car to the market this year.

In the robot business, Musk said he expected explosive growth as Tesla ramped up production of its humanoid Optimus helpers to 100,000 a month in five years.

“We’ll go from a world where robots are rare to where they’re so common that you don’t even look up,” he said.

Asked about whether he would want more than his current 13 per cent stake in Tesla to keep control, Musk said he did want more but not too much.

“I think my control over Tesla should be enough to ensure that it goes in a good direction,” he said, “but not so much control that I can’t be thrown out if I go crazy.”

-AAP