Tesla’s prolonged sales downturn is set to come under further scrutiny when the electric vehicle maker reports its second-quarter earnings after markets close on Wednesday.
The TSLA stock was up around 0.30% to trade at around $333.11.
The Tesla stock has continued to struggle since the start of the year. In the past six months, the EV major has seen its stock slump by around 19%.
The company is grappling with deepening operational pressures, weakening profitability, and the looming threat of losing its position as the world’s largest EV maker.
After years of steady expansion, Tesla has now posted two consecutive quarters of year-on-year sales declines of at least 13% — a first in the company’s history.
Vehicle deliveries in the second quarter dropped 13.5% to approximately 384,000 units compared to the same period a year ago.
That follows a similarly steep decline in the first quarter, which also saw Tesla’s net income plunge 71% year over year.
Wall Street expects another earnings dip for Tesla
According to a FactSet poll of analyst estimates, Wall Street expects Tesla to report earnings per share of 39 cents on revenue of $22.1 billion for the three months ended June.
That would represent a drop from 52 cents a share on $25.5 billion in revenue a year earlier.
The anticipated declines reflect the impact of softer vehicle sales, ongoing pricing pressure, and margin compression across global markets.
Benchmark, which has maintained a Buy rating and a $475.00 price target on Tesla ahead of the results, projects the company will report slightly stronger-than-expected revenue of $22.7 billion for the quarter — up 17% sequentially from $19.3 billion in the first quarter.
However, Benchmark’s earnings estimate of 33 cents per share trails the consensus, citing near-term margin headwinds.
Pressure on Tesla’s margins
Benchmark pointed to several challenges likely to weigh on Tesla’s margins in the quarter, including elevated warranty costs, pricing pressure amid stiff competition in the EV segment, and tariffs impacting production and exports.
These factors have become more pronounced in recent quarters, even as Tesla attempts to adjust its product mix and reduce costs.
The company is also confronting rising pressure from global competitors, most notably China’s BYD, which is threatening Tesla’s dominance in global EV sales.
BYD’s aggressive expansion and lower-cost offerings have made it increasingly competitive, particularly in Asia and Europe.
RBC Capital Markets analyst Tom Narayan also holds a Buy rating on the stock, with a price target of $319.
Narayan continues to believe that a lower-priced Tesla model is in the pipeline and could potentially lift sales later in the year.
Investors are expected to watch closely for any guidance or confirmation from Tesla’s management regarding product launches.
The analyst also anticipates updates from Tesla regarding its artificial intelligence initiatives.
In June, the company launched a robo-taxi service in Austin, Texas, marking a step toward what CEO Elon Musk has touted as an AI-led future for the company.
Tesla also plans to begin commercial sales of its humanoid robots in 2026, and analysts expect the company to provide more details on timelines and scale during the earnings call.
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