Tesla earnings to test rebound after deliveries rise 25%

Tesla is due to report second-quarter results after the U.S. market close on Wednesday, with analysts polled by LSEG expecting revenue of $25.71 billion and earnings of 51 cents a share. The update follows a 25% year-on-year increase in quarterly vehicle deliveries, while Tesla shares remain down about 16% this year, compared with an 11% gain for the Nasdaq, according to CNBC.

The earnings release will test whether a rebound in deliveries is translating into stronger financial performance after two consecutive years of annual declines in the number of vehicles handed to customers. In early July, Tesla said second-quarter deliveries exceeded 480,000 vehicles, ahead of analysts’ expectations, CNBC reported.

Analysts expect Tesla’s revenue to rise 14%, according to LSEG estimates cited by CNBC. For an automaker, deliveries are a key operating measure because revenue recognition generally follows the transfer of vehicles to customers, while profitability depends on pricing, production costs, incentives and the mix of models sold.

Auto business faces competition and brand pressure

Tesla’s core electric-vehicle business has been under pressure from Chinese manufacturers including BYD, Nio and Xiaomi, which CNBC said are selling affordable, technology-heavy EVs in markets outside the United States. CNBC also reported that some buyers have boycotted Tesla in response to Elon Musk’s political rhetoric and his work with the Trump administration.

Demand conditions shifted in the first half of the year as higher gasoline prices linked to the U.S. war in Iran supported Tesla sales, with European buyers purchasing more electric vehicles, according to CNBC and the New York Times. During the second quarter, Tesla began selling lower-cost versions of the Model 3 and Model Y and made its premium driver-assistance system, marketed in the U.S. as Full Self-Driving (Supervised), available in some European markets.

The stock decline has coincided with weakness at SpaceX, Musk’s other trillion-dollar company. CNBC reported that SpaceX, which made a record market debut in June, has lost almost 40% of its value since its peak closing price.

Investors look beyond vehicle sales

Musk has shifted more of Tesla’s investor narrative toward autonomous driving and robotics. CNBC reported that Tesla is increasing production of the driverless Cybercab and reworking older production lines in Fremont, California, to build Optimus humanoid robots.

On Tesla’s April earnings call, Musk said: “I think Optimus will be our biggest product, not just Tesla’s biggest product ever, but probably the biggest product ever.” He has described an AI-powered robot that could serve roles ranging from babysitter to factory worker to surgeon.

Forrester analyst Paul Miller told CNBC by email that Tesla’s management has made “plenty of big claims about autonomous mobility and physical AI over the years,” while missing some of its “bolder bets.” Musk told investors in 2019 that 1 million Tesla robotaxis would be on the road by 2020. Last year, he said Tesla’s autonomous ride-hailing services would cover “probably half the population of the U.S.” by the end of 2025. At the World Economic Forum in Davos this year, he said Tesla Robotaxis would be “very, very widespread” in the U.S. by year-end, a target CNBC described as still far off.

In autonomous ride-hailing, CNBC said Tesla trails Alphabet’s Waymo in the U.S. and Baidu’s Apollo Go in China. In humanoid robots, where Tesla is still developing Optimus, competitors include China’s Unitree, Boston Dynamics, Agility Robotics, Apptronik and London-based Humanoid.

Investors on Wednesday’s conference call are expected to seek updates on driverless technology, robotics and potential cooperation between Tesla and SpaceX. CNBC said those topics include Terafab, a chip factory the companies plan to build and operate jointly with Intel in Texas.

This story draws on original reporting from CNBC.