Tesla Q2 Earnings Preview: Will the EV Giant Disappoint Again?

Tesla TSLA is set to release second-quarter 2025 results on July 23, after the closing bell. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings and revenues is pegged at 40 cents per share and $22.6 billion, respectively.

The consensus mark for second-quarter earnings per share has declined by a cent in the past seven days. The estimate for the bottom line implies a 23% contraction from the year-ago levels. The Zacks Consensus Estimate for quarterly revenues suggests a year-over-year decline of 11.3%.

In the last earnings season, the company missed earnings estimates. In the trailing four quarters, Tesla missed estimates thrice and beat once, with the average negative earnings surprise being 8.3%.

Tesla, Inc. price-eps-surprise | Tesla, Inc. Quote

Tesla delivered 384,122 cars (373,728 Model 3/Y and 10,394 other models) worldwide in the second quarter. The figure declined 13.5% from the year-ago quarter, marking it the biggest quarterly sales drop in the company’s history. This was also its second consecutive quarterly drop. The deliveries also missed our estimate of 420,079 units.

In the first quarter of 2025, Tesla attributed weak deliveries to production disruption associated with the Model Y changeover. However, this doesn’t hold true for the second quarter as the new Model Y has been ramped up across factories. In fact, Tesla is producing more and building up inventories, which clearly indicates a demand problem. The sales took a big hit in Europe, especially. Tesla’s brand image is not the same as before. The company’s aging model lineup and CEO Elon Musk’s increasingly polarizing image have been hurting the company’s sales amid cut-throat competition.

We expect revenues from automotive sales to decline more than 6% in the to-be-reported quarter. Gross margins from automotive sales are expected at 15%, down 3 percentage points from the year-ago period.

While the automotive segment is likely to be under pressure, Tesla is set to benefit from increasing energy generation and storage revenues, thanks to the positive reception of Megapack and Powerwall products. In the second quarter of 2025, Tesla deployed 9.6 GWh of energy storage, reflecting an increase from 9.4 GWh in the corresponding quarter of 2024. We expect revenues from the Energy Generation/Storage segment to be $3.03 billion, suggesting an uptick on both a sequential and a year-over-year basis. Our estimate for Services/Other unit is pegged at $3.15 billion, implying growth of 20% year over year.

Tesla’s massive operating expenses and capital expenditures are likely to weigh on profits and limit cash flows. The company continues to invest heavily to expand gigafactory output, ramp up 4680 battery cell production, and enhance its Supercharger network. Spending is also elevated on AI-related technologies and upcoming product launches. Tesla expects capex in 2025 to remain at 2024’s elevated levels, alongside a rise in operating expenses.

Our proven model doesn’t conclusively predict an earnings beat for Tesla this earnings season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here.

Earnings ESP: Tesla has an Earnings ESP of +0.82%. This is because the Most Accurate Estimate is pegged 1 cent above the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Tesla currently carries a Zacks Rank #4 (Sell).

(See the Zacks Earnings Calendar to stay ahead of market-making news.)

While an earnings beat looks uncertain for Tesla, here are a few players from the auto space that, per our model, have the correct ingredients to post an earnings beat this time.

Lear Corporation LEA will release second-quarter 2025 results on July 25. The company has an Earnings ESP of +8.89% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Lear’s to-be-reported quarter’s earnings and revenues is pegged at $3.03 per share and $5.62 billion. Lear surpassed earnings estimates in each of the trailing four quarters, with the average surprise being 13%.

Ferrari N.V. RACE will release second-quarter 2025 results on July 31. The company has an Earnings ESP of +2.15% and a Zacks Rank #2.

The Zacks Consensus Estimate for Ferrari’s to-be-reported quarter’s earnings and revenues is pegged at $2.56 per share and $2.04 billion, respectively. Ferrari surpassed earnings estimates in each of the trailing four quarters, with the average surprise being 10.75%.

BorgWarner BWA will release second-quarter 2025 results on July 31. The company has an Earnings ESP of +11.20% and a Zacks Rank #3.

The Zacks Consensus Estimate for BorgWarner’s to-be-reported quarter’s earnings and revenues is pegged at $1.04 per share and $3.52 billion, respectively. BorgWarner surpassed earnings estimates in each of the trailing four quarters, the average surprise being 15.74%.

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