Tesla attributed the revenue decline to a drop in vehicle deliveries, less money from regulatory credit sales and a lower average selling price for its vehicles. Still, Musk struck an optimistic tone on Tesla’s post-earnings call and is banking on a rapid expansion of the company’s robotaxi service.

Tesla Inc.’s core car-making business is facing a deteriorating outlook, providing a major test of Chief Executive Officer Elon Musk’s ability to lift the stock price with his vision of a self-driving future.