Tesla at a Crossroads: What to Watch in Q2 Earnings

Core Viewpoint - Tesla is facing significant scrutiny as it prepares to report its Q2 earnings, with investors eager to understand the company's future amidst various challenges and opportunities [1][14]. Financial Performance - Tesla has missed the Zacks Consensus Estimates six times in the past seven quarters, with an average miss of -8.33% over the last four quarters [2][3]. - Year-to-date, Tesla shares are down 18.4%, contrasting with a 6.6% increase in the S&P 500 Index [4]. Business Developments - Despite being the leading global electric vehicle manufacturer, Tesla's legacy business is experiencing a slowdown, prompting the company to diversify and transition its business model [5][14]. - Tesla has launched its robotaxi service in Austin, Texas, marking its entry into the robotaxi market, which is currently dominated by Waymo [6]. - The energy business has shown promise, with energy storage deployments doubling year-over-year in 2024 and revenues increasing by 67% [10]. Strategic Questions - Investors are questioning how quickly Tesla plans to expand its robotaxi service to other cities [6]. - There is speculation about whether Tesla will invest in xAI, which could help diversify its business into the AI sector [8]. - Concerns exist regarding the potential decline in Tesla's annual revenues for 2025 and the first-ever margin decline in 2024 [9]. - The impact of tariffs and political dynamics on Tesla's margins remains uncertain, especially following Musk's public disputes with political figures [10][13].