logo
Tesla's Q2 Earnings Will Likely Focus on Politics and Robotaxis, But Investors Should Really Watch for These 5 Things

Tesla's Q2 Earnings Will Likely Focus on Politics and Robotaxis, But Investors Should Really Watch for These 5 Things

Yahoo17-07-2025
Tesla (TSLA) will release its Q2 earnings on July 23. While the earnings are expected to be soft, considering the double-digit fall in deliveries in the second quarter, all eyes will be on CEO Elon Musk's commentary during the earnings call. In this article, we'll look at Tesla's Q2 earnings estimates and examine some of the topics that might be featured and some issues that ought to be discussed, but might not be.
Tesla's Q2 Earnings Estimates
Consensus estimates call for Tesla's Q2 revenues to fall 12.3% year-over-year. The estimates aren't surprising, as Tesla's deliveries, which closely approximate vehicle sales, fell 13.5% year over year in the quarter. The decline was higher than the 13% fall in Q1 and was the worst ever for the company.
More News from Barchart
Dear Google Stock Fans, Mark Your Calendars for July 23
Dear UnitedHealth Stock Fans, Mark Your Calendars for July 29
Peter Thiel Is Betting Big on This Ethereum Treasury Stock. Should You Buy Shares Now?
Our exclusive Barchart Brief newsletter is your FREE midday guide to what's moving stocks, sectors, and investor sentiment - delivered right when you need the info most. Subscribe today!
Analysts expect Tesla's Q2 earnings per share (EPS) to fall 33.3% as compared to the corresponding quarter last year. For the full year, the company's EPS is expected to be 34.3% lower than last year.
Tesla's Q2 Earnings Call Could Be About AI and Robotaxis
Tesla's Q2 earnings call could be more about artificial intelligence (AI), robotaxis, and Musk's politics. The company might discuss the Austin robotaxi rollout and provide color its plans to expand the service to other cities. Tesla might also provide an update on its Optimus humanoid robot, which Musk believes is a multitrillion-dollar opportunity. Musk recently floated the idea of Tesla investing in his AI company xAI, and during the earnings call, we might get to hear more about that proposal.
Musk's political activities, including his launch of a new political party, might also be in focus. Notably, the key reason Tesla stock rose sharply after releasing its Q1 earnings despite missing on both the top line and bottom line was Musk's promises of scaling back his political activities. Musk subsequently left the Department of Government Efficiency (DOGE), but instead of pulling back on politics, the world's richest person has doubled down.
5 Things I'll Be Looking for in Tesla's Q2 Report
Outside of AI and robotaxis, these are the things I'll be listening out for:
Update on the Low-Cost Model: Tesla had previously said that it would commence production of its affordable model in the first half of 2025, but so far, we don't have any official update. During the Q2 earnings call, I will watch for an update on that platform.
2025 Delivery Guidance: With the electric vehicle (EV) tax credit set to end in September, the demand environment for the U.S. EV industry might only deteriorate. During the Q2 earnings call, Tesla might revisit its 2025 delivery guidance as the probability of yearly growth in deliveries looks bleak, even as I expect a bump in Q3, as buyers might rush to leverage the tax credits before they phase out in Q4.
Cybertruck: The deliveries of Tesla's Cybertruck pickup have underwhelmed, and the model is far from being a success story. Tesla started trade-ins for the uniquely shaped vehicle earlier this year, but the depreciation rates were reportedly too high. During the Q2 earnings call, I will watch for any discussion on the model that has failed to live up to expectations.
Energy Business: Tesla's Energy business has reported a sequential fall in deployments for two consecutive quarters. I will watch out for any discussion on the Energy business, which Musk once said has the potential to be even bigger than the automotive business.
Margins and Profitability: Tesla's once industry-leading margins have withered away amid the price war that it initiated with its massive price cuts. The company's lucrative regulatory credit business also faces strains now as the One Big Beautiful Bill Act eliminates the penalties for non-compliance with Corporate Average Fuel Economy (CAFE) standards. Amid sagging profitability, sales of regulatory credits were a silver lining for Tesla, and if not for these, the company would have posted a GAAP loss in Q1. William Blair analyst Jed Dorsheimer estimates that sales of three-fourths of Tesla's regulatory credits were linked to CAFE standards. That revenue stream is now at risk as automakers don't necessarily need to buy these regulatory credits from Tesla to meet the standards. I will be watching for commentary on regulatory credits as a result.
Pre-Q2 Earnings Forecast for Tesla Stock
Sell-side sentiment towards Tesla is not quite bullish heading into the confessional, and last week, Mizuho and Goldman Sachs lowered their target prices while maintaining their respective ratings. William Blair went a step further and downgraded the stock from an 'Outperform' to 'Market Perform.' Tesla is trading above its mean target price of $296.59, which is something that's not uncommon for the Elon Musk-run company.
All said, given Tesla stock's propensity to react to Musk's commentary and other non-fundamental factors, I would refrain from betting against TSLA even as it is among the most shorted stocks heading into the Q2 confessional. While I expect the stock to react positively to the report, as many negatives have been factored into it after the recent fall, I still won't add any Tesla shares, given the valuations and the slowdown in the core automotive business.
On the date of publication, Mohit Oberoi had a position in: TSLA. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Bubba Wallace wins Brickyard 400 to become Indy's first Black winner
Bubba Wallace wins Brickyard 400 to become Indy's first Black winner

Yahoo

time6 minutes ago

  • Yahoo

Bubba Wallace wins Brickyard 400 to become Indy's first Black winner

INDIANAPOLIS (AP) — Bubba Wallace became the first Black driver to win on Indianapolis Motor Speedway's 2.5-mile oval, surviving a late rain delay, two overtimes, concerns over running out of fuel and a hard-charging Kyle Larson on Sunday in the Brickyard 400. The third NASCAR Cup victory of Wallace's career was also his biggest. It snapped a 100-race winless streak that dated to 2022 at Kansas. He also won at Talladega in 2021. It's his first win at one of NASCAR's four crown jewel races. 'Unbelievable,' Wallace shouted on his radio after crossing the yard of bricks. And while the final gap was 0.222 seconds, he didn't reach victory lane without some consternation. Larson trailed by 5.057 seconds with 14 laps to go but the gap was down to about three seconds with six remaining when the yellow flag came out because of rain. The cars rolled to a stop on pit lane with four to go, giving Wallace about 20 additional minutes to think and rethink his restart strategy. But after beating Larson through the second turn, a crash behind the leaders forced a second overtime, extending the race even more laps as Wallace's team thought he might run out of gas. Wallace risked everything by staying on the track then beat the defending race winner off the restart again to prevent Larson from becoming the fourth back-to-back winner of the Brickyard. It also alleviated the frustration Wallace felt Saturday when he spent most of the qualifying session on the provisional pole only to see Chase Briscoe surpass with one of the last runs in the session. He made sure there was no repeat Sunday, giving an added boost to the 23XI Racing co-owned by basketball Hall of Famer Michael Jordan and last week's race winner, Denny Hamlin, as it continues to battle NASCAR in court over its charter status. ___ AP auto racing:

Bubba Wallace becomes first Black driver to win on Indianapolis Motor Speedway with Brickyard 400 victory
Bubba Wallace becomes first Black driver to win on Indianapolis Motor Speedway with Brickyard 400 victory

CBS News

time6 minutes ago

  • CBS News

Bubba Wallace becomes first Black driver to win on Indianapolis Motor Speedway with Brickyard 400 victory

Bubba Wallace became the first Black driver to win on Indianapolis Motor Speedway's 2.5-mile oval, surviving a late rain delay, two overtimes, concerns over running out of fuel and a hard-charging Kyle Larson on Sunday in the Brickyard 400. The third NASCAR Cup victory of Wallace's career was also his biggest. It snapped a 100-race winless streak that dated to 2022 at Kansas. He also won at Talladega in 2021. It's his first win at one of NASCAR's four crown jewel races. "Unbelievable," Wallace shouted on his radio after crossing the yard of bricks. And while the final gap was 0.222 seconds, he didn't reach victory lane without some consternation. Larson trailed by 5.057 seconds with 14 laps to go, but the gap was down to about three seconds with six remaining when the yellow flag came out because of rain. The cars rolled to a stop on pit lane with four to go, giving Wallace about 20 additional minutes to think and rethink his restart strategy. But after beating Larson through the second turn, a crash behind the leaders forced a second overtime, extending the race even more laps as Wallace's team thought he might run out of gas. Wallace risked everything by staying on the track, then beat the defending race winner off the restart again to prevent Larson from becoming the fourth back-to-back winner of the Brickyard. It also alleviated the frustration Wallace felt Saturday when he spent most of the qualifying session on the provisional pole only to see Chase Briscoe surpass him with one of the last runs in the session. He made sure there was no repeat Sunday, giving an added boost to the 23XI Racing co-owned by basketball Hall of Famer Michael Jordan and last week's race winner, Denny Hamlin, as it continues to battle NASCAR in court over its charter status.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store