Tesla late Wednesday reported second-quarter earnings falling 23% with sales also dropping. On the conference call, CEO Elon Musk sounded a bullish tone on the EV giant's robotaxi plans and Optimus robot. However, the Tesla head warned that with U.S. EV incentives going away, Tesla "could have a few rough quarters." TSLA shares angled lower during the call.
Tesla Q2 EPS fell 23% to 40 cents while revenue declined 12% to $22.49 billion. Analyst consensus expected Tesla earnings of 40 cents with revenue coming in at $22.28 billion, according to FactSet. However, the Sharp consensus, which tracks recent analyst revision trends for a potentially more accurate estimate, predicted sales coming in below $22 billion.
TSLA stock sank 8.2% to 305.3o at the close of Thursday's stock market, undercutting the 50-day and 200-day lines. The stock edged up 0.14% to 332.56 in Wednesday's stock market trade as TSLA has forged a new base within a big, deep consolidation.
6:30 p.m. ET
Tesla Earnings Call Ends, Stock Skids
The Tesla earnings call ended at 6:29 p.m., with Tesla stock down more than 5%.
6:29 p.m. ET
Musk: 'Desire To Buy' Tesla High But...
Musk adds that the "desire to buy" a Tesla car "is very high" but that people "don't have enough money in the bank account to buy it. Literally that is the issue, not a lack of desire, but a lack of ability. So the more affordable we can make the car, the better I think it's going to be."
Musk made these comments when asked about what the upcoming affordable vehicle will look like. The Tesla CEO said the "new vehicle is "just a Model Y — let the cat out of the bag there."
6:29 p.m. ET
Tesla, xAI Aren't Rivals, Musk Insists
On xAI and Tesla competing in the same space, Musk said the two companies are doing separate things. Tesla is focused on "real world AI" and xAI is working on "artificial super intelligence."
6:27 p.m. ET
Musk Sees 'Rough Quarters' Ahead
Musk said Tesla "probably could have a few rough quarters" as U.S. EV incentives go away after Q3. "I'm not saying there will, but we could. You know, Q4, Q1, maybe Q2 but once you get to autonomy at scale in the second half of next year, certainly by the end of next year, I think I would be surprised if Tesla's economics are not very compelling."
That also underscores that Musk is counting on self-driving to revive growth.
6:23 p.m. ET
FSD Adoption 'Marked Improvement'
Taneja said Tesla has seen a "marked improvement in FSD adoption" since the company rolled out FSD version 12. The Tesla CFO noted there has been around a 25% increase of adoption.
6:20 p.m. ET
When Will Personal Teslas Join Robotaxi Network?
When will personally owned vehicles in the robotaxi network? "We haven't really thought about that," Musk said. "I say confidently next year people will be able to add or subtract their car to the Tesla fleet."
6:15 p.m. ET
Musk Says 13% Stake Is 'Major Concern'
Reiterating a theme from the past year, Musk says it is "a major concern" that he has 13% stake in Tesla. "I think my control over Tesla should be enough to ensure that it goes in a good direction, but not so much control that I can't be thrown out if I go crazy," Musk said.
6:08 p.m. ET
Tesla Energy Strong Second Half
Tesla forecasts a strong second half of the year for its megapack sales with growth in the data center segment and standalone storage projects.
6:03 p.m. ET
Tesla CFO Sidesteps Question On xAI Investment
Taneja sidestepped a question about Tesla investment in Musk's xAI. "Tis is not the forum to discuss this topic," Taneja said. Musk added that "shareholders are welcome to put forward any shareholder proposals that they'd like."
Taneja, in response to a question about when and how FSD owners with Hardware 3.0 would be upgraded, said Tesla was focusing on making unsupervised FSD work first on HW 4.0.
6:02 p.m. ET
Tesla Stock Falls During Earnings Call
Tesla stock fell 2% as the earnings call continued, after being little changed just before the call.
6 p.m. ET
'Personal' Self-Driving By Year-End
Musk said that unsupervised full self-driving should be available for "personal use" by the end of 2025 "in certain geographies."
He added, "We're just being very careful about it," Musk added.
Musk has said for about a decade that he expects true self-driving by "this year" or "next year."
5:58 p.m. ET
Tesla Earnings A 'Non Event'?
CFRA analyst Garrett Nelson called Tesla Q2 earnings a "non-event" late Wednesday.
"Of concern, TSLA's automotive regulatory credit revenue plummeted 51% to $439 million from $890 million, given the high margins of this revenue stream and the potential for further declines.
Despite saying in April it would revisit its 2025 guidance in the release, TSLA provided no update, citing difficulty measuring impacts of shifting trade and fiscal policies," Nelson wrote Wednesday.
5:56 p.m. ET
Tesla CFO Expects Higher R&D
"Our operating expenses, especially R&D related-spend will continue to grow. We believe even in the current environment, it is the right strategy to keep making investments," Taneja said.
He also said Tesla's bitcoin holdings made a $284 million gain in Q2.
4:53 p.m. ET
Tesla Sees Higher U.S. Demand In Q3
Tesla Chief Financial Officer Vaibhav Taneja said that President Donald Trump's Big Beautiful Bill Act will "affect our business in the near term." Taneja said that with the $7,500 Biden-Era tax credit ending at the end of September "we have limited supply of vehicles in the U.S. this quarter."
Presumably, after the Q3 pull-forward demand, there will be a big drop in U.S. sales in Q4 and perhaps beyond.
Notably, the CFO said the affordable vehicle will ramp up next quarter "slower than" expected. That suggests a Q4 launch, which means after the tax credit expires.
5:44 p.m. ET
Optimus 3 'Biggest Product Ever'
On the Optimus humanoid robot, Musk said Tesla is working on the design of the latest Optimus, called Optimus 3, and that it will be the "biggest product ever."
Musk said Tesla is retooling "a bunch of things" on Optimus 3 and that it "will probably: have prototypes by the end of the year and then scale production next year.
There have been reports that Optimus production was being pushed back as Tesla works on its latest version.
Further out, Musk forecast one million Optimus units a year in "less than five years."
5:40 p.m. ET
Musk Bullish On Tesla Energy Outlook
"The scale of batteries, battery demand — not many people appreciate just how gigantic the scale of battery demand is," Musk said, sounding a bullish tone on the Tesla Energy business, despite tariff impacts.
Tesla Energy revenue fell in Q2 vs. a year earlier.
5:35 p.m. ET
Elon Musk Sees Big Robotaxi Expansion
Musk says "we are expecting to greatly increase" the geofenced robotaxi area in around two weeks. Musk added that Tesla is "getting regulatory permission" to launch in the Bay Area, Nevada, Arizona and Florida.
He appeared to say there will be Tesla robotaxi ride-hailing in half of the country by the end of the year, assuming regulatory approval.
Tesla stock turned slightly higher.
5:30 p.m. ET
Tesla Earnings Call Begins
The Tesla earnings call began on time at 5:30 p.m. ET.
5:09 p.m. ET
Tesla EV Inventory Rising
In regards to Tesla's EV business, the company saw its global vehicle inventory increase 33% vs. a year earlier to 24 days of supply in Q2. At the end of Q1, Tesla's global vehicle inventory stood at 22 days of supply.
5:05 p.m. ET
Auto Gross Margins Rise
While total gross margins fell 72 basis points to 17.2%, automotive gross margins, excluding credits, in Q2 came in at 15%, slightly above analysts consensus of 13.8%, and up from 14.6% a year ago.
5:05 p.m. ET
Tesla Earnings Reaction: Cantor Fitzgerald
Cantor Fitzgerald analyst Andres Sheppard on Wednesday wrote that following the earnings release, the key questions for the conference call are:
How/when does TSLA plans to expand Robotaxi in Austin?
What are the next steps to launch robotaxi in CA & AZ?
When does TSLA expect to roll out FSD in China and Europe?
What is the updated timeline on Tesla's lower-cost vehicle (previously targeted for 1H25)?
What Vehicle Demand is expected in 2H25?
What impact do you expect from Tariffs?
What is the updated timeline for deliveries of Optimus Bot?
4:56 p.m. ET
Tesla Stock Steady After Earnings
Tesla stock edged up 0.1% after hours, not moving much either way following the largely in-line earnings. Investors are awaiting Elon Musk's conference call.
4:42 p.m. ET
Tesla revenues from automotive regulatory credits declined 51% vs. a year ago and 26% below Q1 2025 levels to $439 million.
Zero-emission credit revenue is likely to trend lower, with U.S. ZEV credits being scrapped.
Futures: Tesla, Google Lead Big Earnings After S&P 500 Hits High
4:30 p.m. ET
Robotaxi Safety Driver To Leave (Sometime)
Tesla on its robotaxi service said in the Q2 earnings release that it "will further improve and expand the service (more vehicles covering a larger area, eventually without a safety rider) while testing in other U.S. cities in anticipation of additional launches."
On the EV giant's outlook, Tesla wrote Wednesday that it is "difficult to measure the impacts of shifting global trade and fiscal policies on the automotive and energy supply chains, our cost structure and demand for durable goods and related services."
"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.
4:25 p.m. ET
'Affordable Models' Remain On Track
Total gross margins in Q2 fell 71 basis points to 17.2%. Meanwhile, Tesla capital expenditures increased 5% compared to a year ago while free cash flow sank 89%.
"While we continue to execute on innovations to reduce the cost of manufacturing and operations, over time, we expect our hardware-related profits to be accompanied by an acceleration of AI, software and fleet-based profits," Tesla said Wednesday in its earnings release.
The EV giant added that its product focus "remains on prudently growing our vehicle volumes in a capex efficient manner by using our existing vehicle production capacity before building new lines."
Tesla said its plans for new vehicles due in 2025 remain on track, with initial production "of a more affordable model" starting in June and with "volume production" in the second half.
"We continue to make progress preparing for the launch of additional models this year," Tesla said. Meanwhile, the CyberCab remains on schedule for volume production starting in 2026, according to Tesla.
4:15 p.m. ET
Tesla Stock At The Close
TSLA stock advanced as high as 336.20 intraday before retreating, edging up 0.14% to 332.56 at the close of Wednesday's stock market. The stock rose 1.1% to 332.11 on Tuesday after recently regaining the 50-day and 200-day lines forging a new base within a big, deep consolidation.
3:16 p.m. ET
The Robotaxi In Vegas?
Bloomberg reported Wednesday afternoon that Tesla is in early talks with Nevada officials to launch its robotaxi ride-hailing service in the state.
Discussions took place this week between Tesla and members of Nevada Governor Joe Lombardo's office along with the Nevada Department of Motor Vehicles. No steps were taken beyond communication, according to Bloomberg.
Zoox, the autonomous vehicle startup owned by Amazon.com, plans to start public rides in Las Vegas later this year, with expectations that San Francisco rides will soon follow.
In June, Zoox opened a large new manufacturing facility in the San Francisco Bay Area, with the aim of increasing robotaxi production before launching its commercial rollout before the end of 2025.
12:42 p.m. ET
Tesla Releases Vehicle Safety Report
The EV giant on Wednesday released its vehicle safety report for the second quarter. According to Tesla's numbers, vehicles in which drivers used Autopilot technology recorded one crash for every 6.69 million miles driven.
Tesla drivers who did not use Autopilot registered one crash for every 963,000 miles driven, according to the safety report.
The Tesla safety report compares these to 2023 data from the National Highway Traffic Safety Administration, NHTSA, which shows that in the U.S. an automobile crash happens every 702,000 miles.
Federal regulators have opened multiple investigations into Tesla's driver-assistance systems, including Autopilot and full self-driving, FSD.
Meanwhile, Tesla is also facing a lawsuit in Florida over the 2019 death of Naibel Benavides Leon. The jury trial began on July 14 in Miami.
The facts of the case are that George McGee was driving his Tesla Model S in April 2019 when the car crashed into a parked SUV at more than 50 miles per hour. Benavides Leon, who had been standing next to the vehicle, was killed and Dillon Angulo was injured.
Before the crash, McGee had engaged the Autopilot system, which can steer, brake and accelerate the car on its own.
12:25 p.m. ET
Musk Sets Optimus Waiter Timeline
Prior to Tesla's earnings release, Musk took to X to claim Wednesday that the company's humanoid robot Optimus will "bring the food to your car next year."
Musk previously said this year that Tesla is targeting to build 10,000 Optimus robots in 2025 with "several thousand" performing tasks in Tesla factories by the end of the year.
The goal to have Optimus robots act as wait staff comes as Tesla on Monday officially opened a diner, and supercharging site, in Los Angeles.
This project dates back to 2018 when Musk claimed Tesla planned to open an "old school drive-in, roller skates and rock restaurant at one of the new Tesla Supercharger locations in Los Angeles."
"If our retro-futuristic diner turns out well, which I think it will, Tesla will establish these in major cities around the world, as well as at Supercharger sites on long distance routes," Musk wrote on X Monday.
"An island of good food, good vibes & entertainment, all while Supercharging!" Musk added.
Tesla Stock: Earnings Call Focus
Investors and analysts will be looking for insight from Musk on the earnings call about the company's plans for the still-unseen affordable vehicle and delivery guidance for the rest of the year.
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Analysts will also be dialing in on details on President Donald Trump's Big Beautiful Bill Act. That ends the $7,500 EV tax credit on Sept. 30 and immediately eliminated zero-emission vehicle, or ZEV, credits and the corporate average fuel economy (CAFE) fines. Tesla has been a major beneficiary of the ZEV credits program and CAFE, with automakers that can't meet emissions requirements purchasing credits from the EV giant.
However, for investors, all of that takes a back seat to Tesla's robotaxi and autonomous driving efforts. Musk will most likely sound a bullish tone on the earnings call about the Austin launch and self-driving.
Robotaxi Questions: Expansion And Safety Monitor Outlook
Tesla launched a limited robotaxi ride-hailing service in Austin, Texas, on June 22. There are only handful of Model Y vehicles picking up passengers in Austin, with around 10 on the roads on Day One. The program currently has a "safety monitor" in the front passenger seat and there are also teleoperators who can remotely take control of the vehicle.
Last week, Tesla expanded its geofenced area in an oddly circumscribed design for the robotaxi ride-hailing service in Austin. Musk has also said that Tesla plans to have robotaxi Model Y vehicles on the roads in the Bay Area of California soon.
The Tesla chief on Sunday posted to X that Model Y robotaxi's could be deployed in California's Bay Area "as soon as the regulators approve (they are being quite reasonable)."
The scaling of the robotaxi service is a key part of the bull thesis for Tesla stock and is expected to be in focus on the Q2 earnings call.
What Analysts Are Saying
Piper Sandler analyst Alex Potter on Monday discussed what Trump's decision to cut several regulatory credits could mean for Tesla.
"It's not as bad you think; We frequently receive questions about Tesla's regulatory credits, and for good reason: the company received ~$3.5 billion in 'free money' last year, representing roughly 100% of the FY24 free cash flow," Potter wrote.
The analyst added that it is "fair to ask" how regulatory changes will "threaten" Tesla's earnings outlook.
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"While it's true that the U.S. government is committed to rescinding financial support for the EV and battery industries, Tesla will still book around $3 billion in credits this year, followed by $2.3 billion in 2026," Potter said. "This latter figure represents a modest reduction vs. our previous expectation. There's no need for drastic estimate revisions."
Tesla Bull Sees Dramatically Different Scenario
Wedbush Securities analyst Dan Ives, a longtime Tesla bull, on Tuesday wrote that the "setup into Tesla earnings" is a "dramatically different one than 3 months ago."
"Clearly losing the EV tax credits with the recent Beltway Bill will be a headwind to Tesla and competitors in the EV landscape looking ahead and this cash cow will become less of the story," Ives wrote Tuesday. "We would expect some directional guidance on this topic during the conference call. Importantly we anticipate deliveries globally to rebound in 2H led by some improvement on the key China front with the Model Y refresh a catalyst."
However, Ives said that Tesla's AI initiatives will be "front and center for investors" on the earnings call with analysts "listening carefully" for insights into Tesla investment into Musk's xAI company.
Cantor Fitzgerald analyst Andres Sheppard also on Monday noted that Tesla previously disclosed plans to revise its guidance, as it continues to assess the impacts of the global trade policy and the macro environment. Sheppard added that Musk has also hinted that the company expects a greater impact of tariffs on its energy business than its automotive business.
Tesla Energy's U.S. Megapack plant imports Chinese batteries.
"As a result, we expect TSLA to likely revise down both its automotive and energy storage guidance in Q2. During the call, we also expect an update on the expansion of robotaxis in Austin, (and subsequent rollouts in CA and AZ), and an update on the timeline of the introduction of lower-priced vehicles," Sheppard wrote.
Tesla's Bitcoin Wild Card
It is also worth noting that Tesla's bitcoin holdings are currently worth around $1.36 billion, as the cryptocurrency has galloped higher in recent weeks. Tesla could include bitcoin in its Q2 accounting, after initially doing so in Q4 2024 before ditching that in Q1 due to lower bitcoin prices.
In early 2021, Tesla purchased 11,509 bitcoins for around $1.5 billion. Between the end of March and the end of June this year, spanning the second quarter, Tesla's bitcoin worth declined by around $140 million. The cryptocurrency fluctuated from $119,500 on March 30 to $107,361 on June 30.
Tesla in its Q1 earnings report revised lower its Q4 2024 earnings to 60 cents per share, down 13 cents from the originally reported 73 cents per share, without an explanation. The lower Q4 EPS means 2024 earnings came in at $2.29 per share.
In Q4, Tesla's net income was boosted by a recent change in how companies account for holdings of digital currencies. This policy change resulted in a net income increase of $600 million.
For Q1, Tesla reported its net income changed unfavorably by $562 million due to a $125 million mark-to-market loss on its bitcoin digital assets, according to the company's 10Q federal filing.
Stock Performance
Tesla stock has a new base with a traditional 367.71 buy point, according to MarketSurge chart analysis. A strong post-earnings move above Monday's high of 338 would roughly coincide with a trendline from the top of the new base and the larger consolidation.
Tesla stock rallied from late April to late May in part because Musk said he was backing away from politics and the Trump administration. Since then, Tesla stock has tumbled and rebounded according to news cycles — most of those generated by debate between Musk and Trump.
The stock initially soared after the robotaxi launch but Tesla stock is now up just about 3% since the June 22 service release.
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At Tuesday's stock market close, Tesla stock was up 39% since the April 22 Q1 conference call, lifted by robotaxi bets. Shares are down about 17% for the year, and 32% below their all-time high of 488.54.
Tesla stock has a 21-day average true range of 3.92%. The ATR metric, available on IBD's MarketSurge charting tool, gauges the characteristic breadth of a stock's behavior. Stocks that tend to make large jumps or dives in daily stock market action, the kind that can trigger sell rules and shake investors out of a stock, have a high ATR. Stocks that tend to make more incremental moves have lower ATRs.
Investors can keep tabs on the IBD Leaderboard watchlist, the IBD 50 list of top growth stocks and IBD SwingTrader along with the IBD Sector Leaders list.
Tesla stock has a 65 Composite Rating out of a best-possible 99. The stock also has an 86 Relative Strength Rating and a 58 EPS Rating.
Please follow Kit Norton on X @KitNorton for more coverage.
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