Tesla Q2 2025 Earnings Preview: Three Key Areas to Watch

July 23, 2025July 23, 2025

July 23, 2025

As editor, I’m zeroing in on Tesla’s (TSLA) Q2 2025 earnings report, set for release today, July 23, after the U.S. market closes. With Tesla’s stock down 18% year-to-date and facing headwinds from a 13.5% year-over-year drop in vehicle deliveries to 384,122 units, investor scrutiny is intense. CEO Elon Musk’s political activities and a challenging EV market add complexity to Tesla’s narrative. Here are the three critical areas to watch, drawing on the latest market insights:

Core Auto Business and Margin Pressures
Tesla’s automotive segment, its primary revenue driver, is under strain. Q2 deliveries fell to 384,122 vehicles, a record 13.5% decline from 443,956 in Q2 2024, with production at 410,244 units signaling inventory buildup and demand weakness, particularly in Europe. Analysts expect automotive gross margins to stabilize at around 16.44%, slightly up from Q1’s 16.3% but down from 18.3% a year ago, reflecting price cuts to counter competition from BYD, Ford, and Volkswagen. With revenue projected at $22.6–$22.9 billion (down 11–13% year-over-year) and earnings per share at $0.39–$0.44 (down ~25%), investors will be laser-focused on whether Tesla can preserve margins amid rising costs and the loss of U.S. EV tax credits via the “Big Beautiful Bill.” Watch for management’s commentary on the refreshed Model Y availability and strategies to boost demand.
Robotaxi and Autonomy Roadmap
Elon Musk is likely to pivot attention to Tesla’s autonomous driving ambitions, particularly its robotaxi initiative. The company launched a pilot program in Austin, Texas, in June, using Model Ys with safety operators, and Musk has hinted at expansion to the San Francisco Bay Area, pending regulatory approval. However, Tesla lags behind competitors like Alphabet’s Waymo and Uber’s partner Nuro, and reports indicate no permit applications have been filed for broader rollouts. Investors are eager for concrete updates on fleet growth targets, timelines for unsupervised Full Self-Driving (FSD), and the integration of Tesla’s AI advancements. Musk’s recent comments on merging robotaxi FSD with supervised FSD builds are promising, but regulatory hurdles in Europe and China remain significant. Any delays or breakthroughs here could sway stock sentiment.
Low-Cost EV and New Vehicle Updates
Tesla’s long-promised affordable EV, expected to start production in the first half of 2025 at around $30,000, has seen no tangible progress—no renderings, no prototypes. The cheapest current model, the Model 3, starts at $43,000. Investors are desperate for clarity on the timeline and feasibility of this vehicle, which Tesla claims will drive a 50% growth rate over 2023 levels. Analysts, like Barclays’ Dan Levy, warn of likely delays, a bearish signal for Tesla bulls. Additionally, the Cybertruck’s lackluster sales (under 40,000 units in 2024, far below Musk’s 250,000–500,000 annual target) and the energy storage business’s sequential decline (9.6 GWh deployed vs. 10.4 GWh in Q1) raise concerns. Look for Musk’s guidance on new vehicle development and whether the energy segment, expected to generate $3.03 billion, can offset auto segment weakness.

Why It Matters: Tesla’s Q2 earnings call, starting at 5:30 PM ET, will be a pivotal moment. Musk’s ability to shift focus from soft financials to Tesla’s AI and autonomy vision could dictate stock volatility. With the stock trading at $316.90, 35% below its December 2024 peak, and analysts split (13 Buys, 13 Holds, 9 Sells), the market is at a crossroads. Political risks, including Musk’s fallout with President Trump and his endorsement of Germany’s AfD party, have already dented Tesla’s European market share (down to 2.8% in Germany). Expect a heated Q&A session via the Say platform, with investors pressing for clarity on Tesla’s path to recovery.

Tune into our live coverage on X for real-time updates from Tesla’s earnings call.