Tesla has started limited production on a cheaper model in a bid to boost sluggish demand after revealing its worst slump in quarterly sales for over a decade.

The electric carmaker, effectively run part-time by founder and CEO Elon Musk for much of this year after his now-defunct spell at the heart of Donald Trump’s government, reported a 12% drop in revenues over the second quarter of the year.

Its update showed a total of $22.5bn, despite aggressive discounting and low-cost financing put in place to help shield Tesla from many headwinds.

They include strong competition from cheaper electric vehicles and a backlash against Musk’s former political alignment with the president.

Sales and profits came in lower than analysts had predicted.

Tesla said it was looking to ramp up production of the more affordable model during the second half of this year.

It gave no further details but it is a nod to investor concerns that the appeal of Tesla’s range is restricted when compared to that of competitors.

The results were the first for shareholders to digest since the so-called bromance between Mr Musk and Donald Trump ended acrimoniously in June.

Tesla’s shares remain almost 18% down over the year to date – lagging a recovery among rivals – and were flat in extended trading.

The drag can mainly be explained by the 2025 sales slowdown, Tesla’s particular exposure to the president’s trade war and the often violent backlash against Musk’s former role in the Trump administration which enacted big cuts to federal government spending.

Globally, customers have been put off by interference by Musk in national elections, particularly in Germany, and stiff competition from cheaper alternatives to Tesla’s electric car ranges.

While his departure from Washington allowed the tech tycoon to focus more on his vast business ventures, his beef with the president over the cost of the Big Beautiful tax and spending Bill has left Tesla exposed to retaliation from the White House.

Recent analysis by Sky News showed the extent to which the company’s profitability is threatened through the potential loss of billions of dollars in government subsidies – a sanction threatened by the president.

The latest set of results showed a steady income from these so-called regulatory credits, amounting to $435m between April and June. That was down from the $458m reported for the same period last year.

Tesla had revealed earlier this month that production and deliveries covering the quarter were below expectations.

A total of 384,122 Teslas were delivered in the period, a 13.5% fall on the same period last year.

It marked the second consecutive quarterly sales decline and were not helped by the changeover to the refreshed Model Y.

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One other thing investors were eagerly awaiting news on was the supervised self-driving Robotaxi trial – launched last month in Texas.

Videos have since suggested some evident driving mistakes.

Musk has previously said the service would soon reach the San Francisco Bay Area, depending on regulatory approvals, and no update was given on whether papers had yet been filed.

Bloomberg News reported earlier on Wednesday that the company was in talks about operating a Robotaxi service in Nevada.

Two traders jailed for rigging benchmark interest rates have had their convictions overturned by the Supreme Court.

Tom Hayes, 45, was handed a 14-year jail sentence – cut to 11 years on appeal – in 2015, which was one of the toughest ever to be imposed for white-collar crime in UK history.

The former Citigroup and UBS trader, along with Carlo Palombo, 46, who was jailed for four years in 2019 over rigging the Euribor interest rates, took their cases to the country’s highest court after the Court of Appeal dismissed their appeals last year.

The Supreme Court unanimously allowed Mr Hayes’ appeal, overturning his 2015 conviction of eight counts of conspiracy to defraud by manipulating Libor, a now-defunct benchmark interest rate.

Ex-vice president of euro rates at Barclays bank Mr Palombo’s conviction for conspiring with others to submit false or misleading Euribor submissions between 2005 and 2009 was also quashed.

Mr Hayes, who served five and a half years in prison before being released on licence in 2021, described the “incredible feeling” after the ruling.

“My faith in the criminal justice system at times was likely destroyed and it has been restored by the justices from the Supreme Court today and I think it’s only right that more criminal appeals should be heard at this level,” he said.

Both he and Mr Palombo have been described as “scapegoats” for the 2008 financial crisis, but Mr Hayes said: “We literally had nothing to do with it.”

A spokesperson for the Serious Fraud Office (SFO), which opposed the appeals, said it would not be seeking a retrial.

In 2012, the SFO began criminal investigations into traders it suspected of manipulating the Libor and Euribor benchmark interest rates.

Mr Hayes was the first person to be prosecuted by the SFO, which brought prosecutions against 20 people between 2013 and 2019, seven of whom were convicted at trial, two pleaded guilty and 11 were acquitted.

He had also been facing criminal charges in the US but these were dismissed after two other men involved in a similar case had their convictions reversed in 2022.

Mr Hayes, a gifted mathematician who is autistic, was described at his Southwark Crown Court trial as the “ringmaster” at the centre of an enormous fraud to manipulate benchmark interest rates and boost his own six-figure earnings.

He has always maintained that the Libor rates he requested fell within a permissible range and that his conduct was common at the time and condoned by bosses.

Mr Hayes and Mr Palombo argued their convictions depended on a definition of Libor and Euribor which assumes there is an absolute legal bar on a bank’s commercial interests being taken into account when setting rates.

The panel of five Supreme Court justices found there was “ample evidence” for a jury to convict the two men if it had been properly directed.

But in an 82-page judgment, Lord Leggatt said jury direction errors made both convictions unsafe, adding: “That misdirection undermined the fairness of the trial.”

Lawyers representing Mr Hayes and Mr Palombo said the ruling could open the door for the seven others found guilty to have their convictions overturned and that there were grounds for a public inquiry.

London and the UK’s leading status in the global financial system is “fragile”, the boss of Goldman Sachs has warned, as the government grapples with a tough economy.

Speaking ahead of a meeting with the prime minister, David Solomon – chairman and chief executive of the huge US investment bank – told Sky News presenter Wilfred Frost’s The Master Investor Podcast of several concerns related to tax and regulation.

He urged the government not to push people and business away through poor policy that would damage its primary aim of securing improved economic growth, arguing that European rivals were currently proving more attractive.

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He said: “The financial industry is still driven by talent and capital formation. And those things are much more mobile than they were 25 years ago.

“London continues to be an important financial centre. But because of Brexit, because of the way the world’s evolving, the talent that was more centred here is more mobile.

“We as a firm have many more people on the continent. Policy matters, incentives matter.

“I’m encouraged by some of what the current government is talking about in terms of supporting business and trying to support a more growth oriented agenda.

“But if you don’t set a policy that keeps talent here, that encourages capital formation here, I think over time you risk that.”

He had a stark warning about the recent reversal of the “Non Dom” tax policy, which occurred across both the prior Conservative government and the current Labour government, which has played a part in some senior Goldman partners relocating away from London.

Richard Gnodde, one of the bank’s vice-chairs, left for Milan earlier this year.

“Incentives matter if you create tax policy or incentives that push people away, you harm your economy,” Mr Solomon continued.

“If you go back, you know, ten years ago, I think we probably had 80 people in Paris. You know, we have 400 people in Paris now… And so in Goldman Sachs today, if you’re in Europe, you can live in London, you can live in Paris, you can live in Germany, in Frankfurt or Munich, you can live in Italy, you can live in Switzerland.

“And we’ve got, you know, real offices. You just have to recognise talent is more mobile.”

Goldman is understood to have about 6,000 employees in the UK.

Rachel Reeves is currently seeking ways to fill a black hole in the public finances and has refused to rule out wealth taxes at the next budget.

Mr Solomon expressed sympathy for her as her tears in parliament earlier this month led to speculation about the pressure of the job.

“I have sympathy, I have empathy not just for the chancellor, but for anyone who’s serving in one of these governments,” he said, referring to the turbulent political landscape globally.

Commenting on the chancellor’s Mansion House speech last week, he added: “The chancellor spoke here about regulation, she’s talking about regulation not just for safety and soundness, but also for growth.

“And now we have to see the action steps that actually follow through and encourage that.”

One area he was particularly keen to see follow through from her Mansion House speech was ringfencing – the post financial crisis regulation that requires banks to separate their retail activities from their investment banking activities.

“It’s a place where the UK is an outlier, and by being an outlier, it prevents capital formation and growth.

“What’s the justification for being an outlier? Why is this so difficult to change? It’s hard to make a substantive policy argument that this is like a great policy for the UK. So why is it so hard to change?”

The Master Investor Podcast with Wilfred Frost is available across multiple podcast platforms