Tesla’s third-quarter results this week are proving to be more than just another report card on Elon Musk’s kingdom; they’re an acid test for the entire electric vehicle (EV) ETF universe.
Analysts predict Tesla Inc (NASDAQ:TSLA) will earn 56 cents a share on $26.7 billion in revenue, a slight improvement from a year earlier but still hampered by margin compression and a series of recalls. The buzz around robotaxis and humanoid robots has not helped, as Tesla has beaten revenue forecasts in four consecutive quarters —a trend that has begun to spook even the most ardent aficionados.
ETF investors are paying attention. The Global X Autonomous & Electric Vehicles ETF (NASDAQ:DRIV), iShares Self-Driving EV and Tech ETF (NYSE:IDRV), and KraneShares Electric Vehicles & Future Mobility ETF (NYSE:KARS) all underperformed in 2025, each down by between 1.5% and 2% on Wednesday. Tesla, which typically accounts for between 4% and 7% of these funds, remains the sector’s gravitational center, but also its largest source of volatility.
The recall of about 13,000 Model Y and Model 3 cars due to a possible battery connection failure adds another layer of uncertainty. The problem, added to the introduction of lower-cost Model Y and Model 3 variants, reinforces Tesla’s move toward affordability — one that could squeeze profits further before volume sales catch up.
The market has become a bit carried away with the robotaxi mania, cautioned Morningstar’s Seth Goldstein, who has a Sell rating on Tesla. Still, optimism lingers: Wedbush and Canaccord Genuity analysts remain optimistic, with upside targets of up to $600.
For ETF investors, the question isn’t so much whether Tesla beats earnings, but rather if EV funds can pick up speed in a market that’s shifting towards energy transition plays with more visible profit streams. Clean-energy and battery ETFs, such as the Global X Lithium & Battery Tech ETF (NYSE:LIT) and iShares Global Clean Energy ETF (NASDAQ:ICLN), have quietly surpassed their EV peers this quarter, highlighting a shift away from speculative innovation toward practical adoption.
Since Tesla releases its results after the bell, the outcome may dictate whether EV ETFs will charge ahead or remain in the parking lot for a little longer.
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