Tesla (TSLA) will launch its Q2 earnings on July 23. Whereas the earnings are anticipated to be delicate, contemplating the double-digit fall in deliveries within the second quarter, all eyes shall be on CEO Elon Musk’s commentary through the earnings name. On this article, we’ll take a look at Tesla’s Q2 earnings estimates and study a number of the matters that could be featured and a few points that must be mentioned, however won’t be.
Consensus estimates name for Tesla’s Q2 revenues to fall 12.3% year-over-year. The estimates aren’t stunning, as Tesla’s deliveries, which intently approximate automobile gross sales, fell 13.5% 12 months over 12 months within the quarter. The decline was increased than the 13% fall in Q1 and was the worst ever for the corporate.
Analysts count on Tesla’s Q2 earnings per share (EPS) to fall 33.3% as in comparison with the corresponding quarter final 12 months. For the total 12 months, the corporate’s EPS is anticipated to be 34.3% decrease than final 12 months.
Tesla’s Q2 earnings name might be extra about synthetic intelligence (AI), robotaxis, and Musk’s politics. The corporate may talk about the Austin robotaxi rollout and supply colour its plans to develop the service to different cities. Tesla may additionally present an replace on its Optimus humanoid robotic, which Musk believes is a multitrillion-dollar alternative. Musk not too long ago floated the concept of Tesla investing in his AI firm xAI, and through the earnings name, we’d get to listen to extra about that proposal.
Musk’s political actions, together with his launch of a brand new political get together, may additionally be in focus. Notably, the important thing motive Tesla inventory rose sharply after releasing its Q1 earnings regardless of lacking on each the highest line and backside line was Musk’s guarantees of scaling again his political actions. Musk subsequently left the Division of Authorities Effectivity (DOGE), however as a substitute of pulling again on politics, the world’s richest individual has doubled down.
Exterior of AI and robotaxis, these are the issues I’ll be listening out for:
-
Replace on the Low-Value Mannequin: Tesla had beforehand mentioned that it could begin manufacturing of its reasonably priced mannequin within the first half of 2025, however thus far, we don’t have any official replace. Through the Q2 earnings name, I’ll look ahead to an replace on that platform.
-
2025 Supply Steering: With the electrical automobile (EV) tax credit score set to finish in September, the demand surroundings for the U.S. EV {industry} may solely deteriorate. Through the Q2 earnings name, Tesla may revisit its 2025 supply steerage because the likelihood of yearly development in deliveries seems to be bleak, at the same time as I count on a bump in Q3, as patrons may rush to leverage the tax credit earlier than they section out in This autumn.
-
Cybertruck: The deliveries of Tesla’s Cybertruck pickup have underwhelmed, and the mannequin is way from being successful story. Tesla began trade-ins for the uniquely formed automobile earlier this 12 months, however the depreciation charges had been reportedly too excessive. Through the Q2 earnings name, I’ll look ahead to any dialogue on the mannequin that has did not stay as much as expectations.
-
Vitality Enterprise: Tesla’s Vitality enterprise has reported a sequential fall in deployments for 2 consecutive quarters. I’ll be careful for any dialogue on the Vitality enterprise, which Musk as soon as mentioned has the potential to be even greater than the automotive enterprise.
-
Margins and Profitability: Tesla’s as soon as industry-leading margins have withered away amid the worth struggle that it initiated with its huge value cuts. The corporate’s profitable regulatory credit score enterprise additionally faces strains now because the One Massive Lovely Invoice Act eliminates the penalties for non-compliance with Company Common Gas Financial system (CAFE) requirements. Amid sagging profitability, gross sales of regulatory credit had been a silver lining for Tesla, and if not for these, the corporate would have posted a GAAP loss in Q1. William Blair analyst Jed Dorsheimer estimates that gross sales of three-fourths of Tesla’s regulatory credit had been linked to CAFE requirements. That income stream is now in danger as automakers don’t essentially want to purchase these regulatory credit from Tesla to satisfy the requirements. I shall be anticipating commentary on regulatory credit consequently.
