Tesla reports quarterly earnings on Wednesday
Tesla’s assembly line in Austin, Texas.
Tesla Inc. is slated to report quarterly earnings after the bell Wednesday, with all eyes on the EV maker’s sales promises — and the potential clash between those lofty goals and EV incentives that are on their way out.
Tesla spooked investors earlier this year as itreported its first-ever drop in annual sales, setting a more bearish tone for the new year.
The 2024 delivery totals also fell short of Wall Street’s expectations, and muddied Tesla’s 2025 goals with some skepticism. Chief Executive Elon Musk said last year he expects sales growth of 20% to 30% this year, when the company is expected to launch a lower-priced EV and has revamped a few models.
“Investors will focus more on any changes to Tesla’s outlook” at the fourth-quarter earnings day, CFRA analyst Garrett Nelson said.
“We expect Musk to express optimism regarding expectations for positive regulatory developments related to autonomous driving, although we think management could be somewhat more cautious on its outlook for 2025 vehicle-sales growth guidance of 20%-30% given various headwinds facing EV demand growth,” he said.
One of the headwinds is, of course, the Trump administration’s executive order called “Unleashing American Energy,” which, among other provisions, calls to eliminate the “‘electric vehicle (EV) mandate’ and promote true consumer choice,” and halt the distribution of EV incentives that have propelled the market for a few years. The order is likely to face legal challenges.
“Trump 2.0 opposition to EV incentives have hit FY25 volume expectations,” Adam Jonas at Morgan Stanley said in a note this week.
“We believe buy-side expectations (Tesla’s 2025) volume growth are closer to 10% than 20% given pressures on the EV market, China competition, decelerating Cybertruck volumes and expectations of eliminated/repealed EV tax incentives,” Jonas said.
Other Tesla observers argue, however, that Tesla long has been more than an EV maker: The real money to be made is on the company’s advanced driver-assistance systems and the pivot toward robotaxis and humanoid robots, all areas where Musk’s status as Trump’s “first buddy” holds a key advantage in terms of securing regulatory approvals.
Tesla “has some key upcoming catalysts which we expect management may provide additional information during its earning call,” Cantor Fitzgerald analyst Andres Sheppard said, including the rollout of Full Self-Driving, its ADAS system for city driving in China and in Europe in the early part of the year — pending regulatory approvals — and the launch of a commercial robotaxi fleet in California and Texas.
According to FactSet, Tesla is expected to report fourth-quarter adjusted profit of 77 cents a share, which would compare with 71 cents a share in the fourth quarter of 2023. The analysts surveyed by FactSet are calling for sales of $27.2 billion, which would compare with sales of $25.2 billion in the year-ago quarter.
