Tesla will report their earnings for Q2 2025 on July 23 and investors are keeping an eye on them. The consensus of the company is a forecast of 40 cents of profit per share on a $billion dollars of revenues. Both are decreased compared with the previous year where earnings are predicted to decline by 23% and revenue by 11.3%.
Over the last 4 quarters, Tesla has taken a hit on three occasions regarding its expectations and the level of performance continued to be lower than expected. Unprofitable deliveries of cars are the key issue this time. Tesla sold approximately 384,000 vehicles in Q2, which is 13.5% less than in the previous year, a record low. The second quarter of decline in sales in the row.
Although with the production increasing particularly of the new Model Y, the demand is leveling. The European market was battered and there was a decline in sales with the once-solid brand of Tesla losing its single. The fact that it has an aging product range and the controversial Elon Musk image are not doing it any favors either given that a lot of players are competing on the EV front.
The amount of revenue earned through vehicle sales is likely to reduce by over 6%. The gross margins may decrease to 15% as compared with 18% in the last year. On the brighter side, Tesla’s energy business is doing well. Such products as Megapack and Powerwall are gaining popularity. The company deployed 9.6 GWh of energy storage this quarter compared to 9.4 GWh last year. This would increase income in the energy segment to approximately $3.03 billion.
Other revenue streams like services are not left out , they are expected to grow to about $3.15 billion. Nevertheless, surging prices are a bane. These are increased costs that can block profits and cash flows. Tesla has a small positive EPS (Earnings ESP) of +0.82% and has a Zacks Rank #4 (Sell) that does not strongly indicate earnings beat. To conclude, the energy and services operations of Tesla are retreating, but the core auto business is under pressure. This may not be a good quarter for this EV giant with slowing demand, increasing competition and high spending.
