TLDR
- Tesla reports Q2 earnings on July 23, with Wall Street expecting EPS of 39 cents and revenue of $22.1 billion
- Vehicle deliveries dropped 13.5% year-over-year to 384,000 cars in Q2, pressuring sales and earnings forecasts
- Tesla unveiled the Model YL in China – a larger, six-seat version of the Model Y priced around $56,000
- Federal EV tax credit elimination and delayed lower-priced vehicle launch create headwinds for future sales
- Goldman Sachs maintains Neutral rating with $285 price target, citing mixed analyst sentiment across Wall Street
Tesla faces a pivotal moment as Q2 earnings approach this Wednesday, with investors bracing for what could be another wild quarterly report. The electric vehicle maker has delivered plenty of surprises this quarter, from policy changes to new model reveals.
Wall Street analysts expect Tesla to report earnings per share of 39 cents from sales of $22.1 billion for the second quarter. These numbers represent a decline from last year’s Q2 performance of 52 cents per share on $25.5 billion in revenue.
The earnings drop reflects Tesla’s challenging quarter for vehicle deliveries. The company sold approximately 384,000 cars in Q2 2025, marking a 13.5% decrease compared to the same period last year.
Tesla stock traded up 1.4% Monday morning at $334.48. The stock has fallen about 18% year-to-date but remains up 38% over the past 12 months.
Policy Changes Create New Challenges
Several policy shifts under the Trump administration have created headwinds for Tesla’s business model. President Trump eliminated the federal EV purchase tax credit, which previously helped drive consumer demand for electric vehicles.
Congress also revoked California’s waiver that allowed the state to regulate air emissions independently. This change threatens Tesla’s zero-emission vehicle credit sales program, which generated $595 million in Q1.
Wells Fargo analyst Colin Langan expects ZEV credit sales to decline materially in Q2 and continue falling in Q3. He maintains a Sell rating with a $120 price target.
Baird analyst Ben Kallo takes a cautious stance ahead of the earnings report. He points to risks from Tesla’s delayed lower-priced vehicle, originally scheduled for unveiling in the first half of 2025.
RBC analyst Tom Narayan remains more optimistic, maintaining a Buy rating with a $319 target. He still believes a lower-priced car is coming and could boost sales later this year.
New Model YL Targets Premium SUV Market
Tesla surprised investors by revealing the Model YL in China instead of the anticipated affordable compact vehicle. The new variant extends roughly seven inches longer and up to two inches taller than the standard Model Y.
$TSLA
BREAKING: Details of the Model Y L vehicle have been released.Coming in the fall, it's a six-seater with a length of 4,976mm, width of 1,920mm and height of 1,668mm, with a wheelbase of 3,040mm. pic.twitter.com/3mGCiTFTEh
— Tsla Chan (@Tslachan) July 16, 2025
The Model YL features six seats and targets the three-row SUV market. Tesla shared images via Weibo, with China’s Ministry of Industry and Information Technology indicating a fall launch date.
Goldman Sachs analyst Mark Delaney views the Model YL as an “incremental positive” for Tesla’s SUV segment presence. He found the model “more differentiated” than many expected, particularly given subdued expectations from the Q1 earnings call.
Media reports suggest the Model YL will carry an average selling price around 400,000 RMB, approximately $56,000. For comparison, the standard Model Y starts at about 264,000 RMB in China and $45,000 in the U.S.
Tesla hasn’t revealed final pricing or feature details for the Model YL. Questions remain about FSD inclusion, driving range, and whether the price estimate represents final numbers.
AI and Robotics Updates Expected
Investors anticipate updates on Tesla’s AI initiatives during the earnings call. The company launched a robo-taxi service in Austin, Texas, in June and plans to start selling humanoid robots in large volumes by 2026.
Both Baird and RBC analysts expect management to discuss progress on AI-trained robo-taxis and robotics programs. These initiatives represent key growth drivers beyond traditional vehicle sales.
Elon Musk’s recent activities have also drawn investor attention. After leaving Washington in May, he publicly feuded with President Trump and even threatened to start a new political party.
Over the weekend, Musk said he was sleeping at Tesla’s office again. Investors want to hear from him directly and assess his mindset during the earnings call.
Market Expectations and Analyst Sentiment
Options markets suggest Tesla stock could move about 7% in either direction following the earnings report. The stock has averaged an 11% move after the previous four quarterly reports, rising three times and falling once.
Tesla trades at roughly 180 times estimated 2025 earnings, reflecting investor expectations for future growth beyond current fundamentals. This valuation multiple puts pressure on management to deliver on long-term promises.
Goldman Sachs maintains a Neutral rating on Tesla with a $285 price target, roughly 11% below current levels. Among 34 analysts covering the stock, 13 rate it a Buy, 13 a Hold, and 8 a Sell, with an average price target of $298.97.
The Model YL is expected to launch in China this fall, with potential expansion to U.S. and European markets later.
Stay Ahead of the Market with Benzinga Pro!
Want to trade like a pro? Benzinga Pro gives you the edge you need in today's fast-paced markets. Get real-time news, exclusive insights, and powerful tools trusted by professional traders:
- Breaking market-moving stories before they hit mainstream media
- Live audio squawk for hands-free market updates
- Advanced stock scanner to spot promising trades
- Expert trade ideas and on-demand support
