Why did Tesla's quarterly profit fall despite record EV sales?

Tesla saw record second-quarter deliveries of 4,80,126 electric vehicles, rising 25% from the same period last year. However, operating income plunged 57% to about $400 million as heavy discounts squeezed margins. Profit also suffered from massive AI and robotics investments, removal of a $7,500 consumer tax credit for electric vehicles, and sharply lower high-margin regulatory credit revenue.