Tesla Inc. is set to report its Q1 earnings tonight in what is shaping up to be a critical moment for the electric vehicle (EV) giant and its visionary CEO, Elon Musk. With shares down 44% year-to-date, Tesla is currently the worst-performing stock among the once-celebrated "Magnificent Seven" tech giants.
The sharp decline has rattled investor confidence, as disappointing vehicle deliveries, growing geopolitical tensions, and perceived distractions from Musk’s involvement with ventures like SpaceX, DOGE, and political engagements have weighed heavily on the company’s outlook.
"Investors have started to lose patience with the EV giant," said Josh Gilbert, Market Analyst at eToro. "Protests at Tesla showrooms, declining brand loyalty in key markets, and growing consumer backlash have all fueled the current downward spiral."
Tonight’s earnings report will be closely scrutinized, with Wall Street expectations set at USD $0.44 in earnings per share and USD $21.43 billion in revenue.
Historically, Tesla has only beaten earnings expectations twice in its last eight reports — but those rare wins saw immediate double-digit stock gains of 12% and 22% respectively.
Three key areas investors are watching:
1. Impact of Auto Tariffs:
With new 25% U.S. auto tariffs looming, Tesla’s commentary on potential impacts will be critical. While domestic and Chinese production help reduce exposure, the possibility of retaliatory tariffs from China remains a major risk — especially given that over 20% of Tesla’s 2024 revenue came from the Chinese market.
2. Musk’s Political and Crypto Ties:
Elon Musk’s high-profile involvement in politics and cryptocurrency, including Dogecoin (DOGE) and advisory roles in the Trump administration, presents a double-edged sword. While some hope his political influence may shield Tesla from harsh regulations, others fear it could alienate Chinese consumers who are increasingly turning to local EV leaders like BYD.
3. New Models and Innovation Roadmap:
Investors are eager for updates on the long-promised, more affordable Tesla models, which Musk has dubbed a potential "game changer." Concrete timelines on this rollout, as well as progress on Full Self-Driving (FSD) adoption and the robotaxi launch, are expected to be key drivers of future growth.
“Ultimately, Musk needs to deliver some magic and step up to the plate,” added Gilbert. “He’s done it many times before, but this feels like a crucial moment for Tesla. We’ll know more after tonight’s earnings, but these three areas will be huge in Tesla’s 2025 comeback or continued struggle.”
