Tesla Inc. (TSLA) Stock: JPMorgan's Robotaxi Test Drive Changes Everything

TLDR

Table of Contents

Tesla reports Q2 earnings today with expected revenue of $22.79 billion, down 9% year-over-year
JPMorgan analysts tested Tesla’s Austin robotaxi service and returned with positive feedback, calling it “solid and safe”
Tesla delivered only 384,122 vehicles globally in Q2, a 13.5% drop from last year
The promised cheaper $30,000 EV remains delayed with no production timeline or vehicle renderings
Tesla stock down 17.8% year-to-date as competition increases and EV tax credits face removal

Tesla releases its second quarter earnings today after market close, with Wall Street expecting revenue of $22.79 billion and adjusted earnings per share of $0.43. The electric vehicle maker faces a challenging quarter marked by declining sales and growing competition.

The company delivered 384,122 vehicles globally in Q2, representing a 13.5% drop year-over-year. Tesla’s core auto business continues to struggle with weakness in key regions like Europe and sliding US sales data.

Revenue expectations sit at $22.79 billion, down 9% compared to the $25.05 billion reported in the same quarter last year. Adjusted net income is projected at $1.513 billion, slightly lower than the previous year.

Tesla stock has declined 17.8% year-to-date, underperforming compared to other tech stocks. The company faces headwinds from sector tariffs of 25% on foreign cars and parts that remain in place.

CEO Elon Musk’s political activities have reportedly hurt the company’s reputation among consumers. Rising competition from hybrid vehicles and better EV alternatives has further pressured Tesla’s market position.

Robotaxi Testing Shows Promise

JPMorgan analysts recently visited Austin to test Tesla’s autonomous ride-hailing service for a full day. The team returned with surprisingly positive feedback, describing the platform as “solid and felt like a safe ride at all times.”

This represents a shift in tone from JPMorgan, which previously stated the robotaxi platform was “likely to disappoint.” Analyst Ryan Brinkman maintains his “Sell” rating with a $115 price target, implying 65.4% downside potential.

Tesla launched its robotaxi service in Austin on June 22. The invitation-only service now covers approximately 42 square miles in a geofenced area.

The company plans to expand testing to the San Francisco Bay Area, though reports suggest state permit applications have not yet been submitted. Alphabet’s Waymo continues to lead the autonomous vehicle space with broader deployments across multiple cities.

Cheaper EV Remains Elusive

Tesla promised a year ago that production would begin on new vehicles, including a cheaper EV, in the first half of 2025. Investors and analysts are still waiting for any concrete updates.

The company’s cheapest current offering is the rear-wheel-drive Model 3 sedan, starting around $43,000 without incentives. No renderings or production timeline have emerged for the promised $30,000 vehicle.

Tesla Model 3 Performance:
• 0-60 mph in 2.9s
• 1/4 mile in 10.9’s @ 126mph
• Adaptive Suspension
• Sport Bucket Seats
• 20” Forged Wheels
• 510 Horsepower
• Carbon Fiber Accents
• Full Self-Driving Capabilities
• Unique Front Fascia
Price: $44,490 pic.twitter.com/tj9KshNpwe
— Nic Cruz Patane (@niccruzpatane) February 7, 2025

Barclays analyst Dan Levy expects Tesla may delay the launch of the low-cost model to the fourth quarter. This delay could be perceived negatively by investors expecting the cheaper option to boost sales volumes.

Tesla previously stated these new vehicles would help the company return to a 50% growth rate compared to 2023. The ongoing delay raises questions about Tesla’s ability to meet these ambitious targets.

The changeover to the refreshed Model Y may have contributed to the Q2 sales decline. Management faces questions about availability of the new Model Y in Tesla’s main selling regions.

Trump administration plans to remove the $7,500 new EV tax credit and $4,000 used EV tax credit at the end of the third quarter. This regulatory change could further impact Tesla’s sales momentum.

Analysts maintain a Hold consensus rating on Tesla stock with an average price target of $299.52, implying 9.8% downside from current levels. The rating is based on 13 Buy, 12 Hold, and seven Sell recommendations.

Tesla stock closed at $332.11 on Tuesday, up 1.10% for the day. Pre-market trading showed the stock at $332.23, up 0.04%.

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