Tesla reported another drop in quarterly profits on Wednesday on lower auto sales amid intensifying electric vehicle competition and lingering backlash over CEO Elon Musk's involvement in US politics.

The company reported second-quarter profits of US$1.2 billion, down 16 percent from the year-ago level. In a press release, it emphasised ongoing efforts to lead in artificial intelligence and robotics.

Revenues fell 12 percent to US$22.5 billion.

Lower profits had been expected after Tesla earlier this month disclosed a decline in auto deliveries. Its results were also impacted by a fall in average vehicle selling prices and higher operating expenses driven by AI and other research and development projects.

Tesla did not offer an outlook on full-year vehicle production, citing shifting global trade and fiscal policies.

"While we are making prudent investments that will set up both our vehicle and energy businesses for growth, the actual results will depend on a variety of factors, including the broader macroeconomic environment, the rate of acceleration of our autonomy efforts and production ramp at our factories," Tesla said.

The results come on the heels of Tesla's launch last month of a robotaxi service in the Texas capital, Austin, Musk's first fully autonomous offering after pushing back the timeframe many times.

Musk has heavily touted Tesla's autonomous driving programme, as well as the company's "Optimus" humanoid robot, which employs artificial intelligence technology.

But analysts have criticised Tesla's sluggishness in unveiling new autos, while questioning Musk's commitment to an earlier goal of launching a state-of-the-art electric vehicle priced at around US$25,000 to bolster the odds of mass deployment.

In Wednesday's press release, Tesla said, "We continue to expand our vehicle offering, including first builds of a more affordable model in June, with volume production planned for the second half of 2025."

Shares of Tesla dipped 0.4 percent in after-hours trading. (AFP)