Tesla under ‘heavy scrutiny’ by investors and analysts ahead of earnings call
Tesla’s latest earnings update has investors watching closely as questions mount over Elon Musk’s next move.
Tesla will report its second-quarter earnings on Wednesday evening (United States time), with investors and analysts watching closely.
The electric vehicle giant’s expected revenue is to come in at USD 22.7 billion, down 11 per cent from the same quarter last year.
It’s also experienced a decline in global deliveries, down 13.5 per cent year-on-year to 384,122 vehicles, which marks the third consecutive quarter of decline and the lowest volume recorded in more than a year.
The company’s share price has fallen 18 per cent since the beginning of the year and is now trading 35 per cent below its December 2024 peak.
eToro market analyst Josh Gilbert said the result from the earnings call is unlikely to satisfy investors.
“Even if Tesla delivers a solid set of numbers, it’s unlikely to escape heavy scrutiny when it reports earnings on Wednesday, US time,” he said.
Gilbert said Musk’s latest developments in AI and cost-cutting might provide some relief in the short term, but “expectations are low”.
Tesla’s product has remained flat year-on-year at 410,244 vehicles, which has raised concerns about demand.
On top of slowing demand, the Cybertruck has not been as successful as investors hoped.
“The Cybertruck has also been arguably somewhat of a flop so far, with a third consecutive quarter of falling sales now hitting their lowest point in a year,” Josh Gilbert said.
Regardless, Tesla remains a dominant force in the global electric vehicle market. However, its success has not been without challenges.
Tesla CEO Elon Musk’s growing interest in politics has drawn criticism from major investors.
He previously promised to distance himself from politics but has since announced plans for his political party in the United States, a terrible move according to Gilbert.
“Elon’s position as a Tony Stark-like personality at the head of the company was a boon for a long time, but it’s hard to argue that his prominence isn’t having some detrimental effect on the brand,” he said.
“The Tesla CEO made a broad commitment to step away from politics after his controversial time with DOGE.
“Musk has previously been criticised as being absent as Tesla’s CEO, so these renewed political aspirations are unlikely to please investors who were hoping for a steadier hand at the helm of Tesla.”
Adding to investor worry is Musk’s attempt to channel Tesla cash reserved into his private artificial intelligence venture xAI, a move that needs to be approved by investors first, according to Gilbert.
“This will require Tesla investor approval, and even if there is a theoretical future benefit for Tesla in doing so, it’s going to be a very hard case to make,” he said.
Despite these pressures, Gilbert said its continued development in autonomous driving, specifically the Robotaxi program, will eventually pay off.
“That’s worth watching closely, although any meaningful contribution to revenue is still years away,” he said.
He added that Tesla is a “household name” and “even amid the chaos of Musk”, it maintains its strong position in the EV market.
“That’s why it maintains its position as the second most-held stock on the eToro platform in Australia, and why so many shareholders back it as a long-term investment,” he said.
“Markets expect EPS of USD$0.44 with revenue of USD$22.8 billion.”
US goes nuts over Musk’s latest move
Elon Musk has finally pulled the trigger on an idea he has been talking about for years and Americans are lapping it up.
Australia’s ‘most hated’ drivers exposed
If you reckon you’re pretty good behind the wheel, your fellow drivers, family and friends probably have a big surprise for you.
Huge ask for Australia’s most valuable car
One of the rarest supercars ever built has surfaced in Australia, and it’s expected to fetch a jaw-dropping sum.