Tesla earnings updates: Elon Musk's EV maker Q2 report comes amid critical FSD, robotaxi expansion

Tesla stock could be heading toward an inflection point, if Musk continues to lead Tesla full-time and stay on top of its most important projects, analysts at Wedbush Securities said.

In a note on Tuesday, the firm said that the outlook for Tesla looked “dramatically different” now compared to three months ago, when Musk was still working closely with the Trump administration.

In a previous note, Wedbush analysts expressed concerns over Musk’s political intentions, calling his plan to create a new political party a “Soap Opera” that needed to end. The firm also outlined a list of actions Tesla’s board needed to take to move the company forward, which included drafting a new pay package for Musk and setting guidelines for Musk’s political plans.

“We are at a ‘positive crossroads’ in the Tesla story,” the analysts said.

Wedbush reiterated its “Outperform” rating and the stock and $500 price target, implying about 49% upside from current levels.

Even as Tesla has finally launched its robotaxi service in Austin, sales of its regular electric cars have been lacklustre.

The automaker’s deliveries fell 13.5% in the last quarter compared to the previous year, with Tesla seeing a similar fall in Q1.

Tesla’s stock is also down over 18% so far this year amid customer blowback over Musk’s politics and growing competition from Chinese EV companies like BYD and Xpeng.

The automaker said it would begin production of new, more affordable models in the first half of 2025 to help grow sales, but that deadline came and went with no acknowledgment from Tesla.

Shareholders are keen to get answers about the new models in Tesla’s Q2 analysts call. A forum for retailer investors to submit questions for the call with Musk and other executives includes several submissions asking for more details about the mysterious affordable EVs.

“Can you provide an update on the development and production timeline for Tesla’s more affordable models? How will these models balance cost reduction with profitability, and what impact do you expect on demand in the current economic climate?” wrote one shareholder in a post that received nearly 3,000 votes on the platform.

— Tom Carter

Tesla is in a difficult spot ahead of earnings, Federico Merendi, an analyst at Bank of America, wrote on Monday.

“Tesla 2Q earnings are likely to be challenged due to tariffs and disappointing deliveries,” Merendi wrote, adding that Tesla sourced its batteries from China and that its exposure to tariffs was “not insignificant.”

The bank reiterated its “Neutral” rating on the stock and raised its price target to $341 a share, up from the prior estimate of $305. Its new price target implies about 3% upside from the current levels.

It’s never boring at Tesla, and this year has been no exception.

The EV giant has battled backlash over CEO Elon Musk’s forays into politics and faced investor discontent over the amount of time the billionaire is spending on other projects.

Shareholders and analysts have been somewhat mollified by Musk’s return to Tesla, with the world’s richest man saying he’s back “working 7 days a week at Tesla and sleeping in the office.”

“Now investors are seeing more of a ‘wartime CEO’ as Elon is laser-focused on the Robotaxi expansion in Austin with more cities soon on the docket for this key autonomous initiative,” wrote Wedbush Securities analyst and Tesla bull Dan Ives in a note on Monday.

Ives, who was previously told to “shut up” by Musk after calling for Tesla’s board to exercise more oversight over their CEO’s political activities, said that he expected sales to rebound as demand for Tesla’s refreshed Model Y grows, especially in China.

He also flagged the broadly successful robotaxi launch and the upcoming shareholder vote on a possible investment in Musk’s artificial intelligence startup xAI as evidence that Tesla is getting its groove back.

— Tom Carter

Musk’s promise to create a new political party could be a short-term headwind for Tesla stock, analysts at Morgan Stanley wrote in a note, calling the situation a “party crasher.”

The bank pointed to the immediate drop in Tesla stock after Musk officially announced his plan to form the “America Party” in a post on X earlier this month, which sent shares tumbling around 7%.

“While the situation remains fluid, we believe investors should be prepared for further devotion of resources (financial, time/attention) in the direction of Mr. Musk’s political priorities which may add further near-term pressure to TSLA shares,” analysts wrote.

Still, Tesla stock remains a “top pick” for the bank. Analysts reiterated their $410 price target on the stock, pointing to their growth forecasts for Tesla’s auto business.

Second quarter

• Adjusted EPS estimate: 42c
• EPS estimate: 32c
• Revenue estimate: $22.64 billion
• Gross margin estimate: 16.5%
• Operating income estimate: $1.23 billion
• Free cash flow estimate: $760 million
• Capital expenditure estimate: $2.43 billion

Full year

• Production estimate: 1.65 million
• Deliveries estimate: 1.65 million
• Capital expenditure estimate: $10.14 billion

Source: Bloomberg data