Tesla Q2 earnings preview: 3 things to watch

Tesla (TSLA) stock has pared some of its early 2025 losses, but a now-rocky relationship between CEO Elon Musk and President Trump is taking its toll on the optimism that fueled the company’s late-2024 run.

Tesla’s second quarter earnings report, slated for release on Wednesday after the bell, comes at a time when the S&P 500 (^GSPC) and Nasdaq (^IXIC) are surging to new highs, bucking Trump’s tariff war that led to broad-based selling and fears of a global economic slowdown.

While other auto stocks have recovered, Tesla is still down nearly 18% year to date, with sector tariffs of 25% on foreign cars and parts still in place.

Now the focus is on the struggling core auto business and the future of Tesla’s robotaxi rollout.

Here are three things to watch this Wednesday.

Tesla’s bread and butter, despite Musk’s embrace of a robot-driven future, is its core auto business. That drives the huge majority of revenue and profit at Tesla.

The company is expected to report second quarter revenue of $22.79 billion, per Bloomberg estimates, a 9% drop compared with the $25.05 billion reported a year ago. From a profitability standpoint, Wall Street analysts are expecting adjusted EPS of $0.43, translating to adjusted net income of $1.513 billion, down slightly from a year ago.

Musk’s reputational hit stemming from his political activities, the rise of better competition, and US consumer preferences for vehicles like hybrids have Tesla and the EV industry as a whole worried. For Tesla in particular, weakness in key regions like Europe has been an ongoing issue, and the latest registration data shows US sales sliding as well.

This resulted in Tesla delivering only 384,122 vehicles globally in Q2, a 13.5% drop year over year. The changeover to the refreshed Model Y may have blunted sales. But the question for management is the availability picture for that new Model Y in Tesla’s main selling regions.

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On the bright side for Tesla is Elon Musk’s big bet on the future with robotaxis. Tesla and Musk will most likely focus on that business, and this may perhaps point to future rollout plans with more cars and regions.

Tesla has expanded its robotaxi testing in Austin, Texas, with a bigger operating area and likely more vehicles coming.

Musk said the company would expand testing to the San Francisco Bay Area, but reports suggest the applications for those state permits have not been submitted.

While the good news is that the test began on time as Musk proposed in mid-May, Tesla still has a long way to go. Alphabet’s (GOOG, GOOGL) Waymo, the leader in the space, has been expanding its robotaxi deployments in the US, and Uber (UBER) is doing so as well with its technology partners.