Tesla will release its Q2 2025 results after market close on Wednesday, July 23. Investors will watch for the EV maker's topline trends amid ongoing production and demand challenges.
Tesla's Q2 revenue is expected to be $22.869 billion, adjusted net income will be $1.549 billion, and adjusted EPS will be $0.435, according to Bloomberg's consistent expectations.
Previous Quarter Review
Tesla's Q1 2025 report shocked the market: revenue fell 9% year-on-year to $19.34 billion, automotive margins slid to 16.3% and EPS missed consensus by almost 29%. Management responded by withdrawing its full-year 2025 growth outlook, blaming "evolving trade policies" and "uncertain macroeconomic conditions".
Political polarisation hits Tesla's bottom line
European market backlash intensifies
Musk's endorsement of Germany's Alternative for Deutschland (AfD) party in January 2025 has triggered measurable damage to Tesla's European operations. Industry data shows Tesla's market share in Germany fell to 2.8% in Q1 2025 from 4.1% in Q4 2024, with several corporate fleet managers publicly cancelling Tesla orders.
The backlash extended beyond Germany, with Norwegian sovereign wealth fund Norges Bank announcing a review of its Tesla holdings, citing "reputational risks associated with political activities." Tesla's charging network partnerships with European retailers have also faced scrutiny, with some reconsidering their associations.
US consumer sentiment shifts
Domestic political entanglements have proven equally damaging. Tesla's brand perception among US consumers has deteriorated significantly since Musk's public feud with President Trump began in May 2025. A recent Harris Poll found Tesla's brand favourability dropped 18 percentage points among Democrats and 12 points among independents between April and June 2025.
The elimination of federal EV tax credits through Trump's "Big Beautiful Bill" has directly impacted Tesla's pricing strategy. The company was forced to implement temporary price cuts of up to $7500 on Model 3 and Model Y vehicles to maintain sales momentum, further pressuring already declining margins.
Regulatory and competitive implications
Musk's political activities have created additional regulatory headwinds. The formation of his America Party has triggered Ethics Office investigations into potential conflicts of interest from his previous DOGE role. Meanwhile, competitors like Ford and General Motors have capitalised on Tesla's political controversies, with Ford's "Built for America" campaign explicitly contrasting its apolitical stance.
Tesla's expansion into new markets has also been complicated by Musk's political profile. Planned manufacturing facilities in India and Southeast Asia have faced increased scrutiny from local governments concerned about associating with politically divisive figures.
Robotaxi updates crucial for Tesla's future
The market will be keenly focused on updates regarding Tesla's robotaxi initiative, especially given its critical role in Tesla's valuation and Elon Musk's vision for autonomous driving. Tesla launched its robotaxi pilot in Austin, Texas, on 22 June 2025, with a small fleet of 10–20 Model Y vehicles operating in a limited area, initially with human safety monitors.
Tesla's stock surged 9.2% after the Austin launch, adding $95.7 billion in market capitalisation, reflecting investor enthusiasm for autonomy. However, a 4% drop followed reports of erratic driving, underscoring volatility tied to robotaxi performance. The earnings call will be critical for Musk to address safety concerns, provide concrete expansion plans, and reinforce confidence in Tesla's autonomous future, especially amid political and competitive headwinds.
Analysts’ Opinions
UBS analysts say Tesla stock remains 'overvalued'. "We see deteriorating fundamentals in the auto business, the removal of 100% margin credit revenue, likely negative revisions to estimates, and a CEO that [is] arguably distracted from the business (or at least may not be as focused on the company as investors would like)," the analysts wrote in a note previewing earnings across the auto industry.
Wedbush Securities analyst Dan Ives, a longtime Tesla bull, wrote Thursday that Musk's comments were "positive relative to the recent shift in investor sentiment regarding Tesla's autonomous vehicle efforts."
Wood’s continued confidence in Musk is consistent with her long-running bet on Tesla, which has remained a top holding across several Ark funds since 2014. “One of the announcements Elon made recently is that he is going to oversee sales in the US and in Europe,” Wood said in an interview on Bloomberg Television. “When he puts his mind on something, he usually gets the job done. So I think he’s much less distracted now than he was, let’s say, in the White House 24/7.”
