Tomorrow, Tesla will report its first-quarter earnings after the bell, and investors are eager to gain insights into the company's future. This year, Tesla has faced significant challenges, becoming one of the worst-performing stocks in the S&P 500. The analyst consensus estimates from FactSet project an earnings per share (EPS) of 41 cents and revenue of $21.345 billion, a slight increase from the $21.301 billion reported in Q1 of the previous year. However, both estimates have been trending downward since the beginning of the year, primarily due to disappointing delivery numbers and a decline in brand popularity.
As of now, Tesla's stock has plummeted more than 40% this year, with a notable decline of over 7% just today. According to Wedbush analyst Dan Ives, substantial changes are necessary for Tesla to recover, including potential shifts in leadership, such as CEO Elon Musk stepping down from his role at the Department of Government Efficiency.
A recent survey on Tesla's investor relations website revealed that investors are particularly concerned about the company's timelines for launching new products, specifically affordable models, full self-driving technology, and the robotaxi service. Additionally, there are worries about how tariffs and political factors may impact Tesla's future. Below are some of the most pressing questions among investors, ranked by the number of upvotes on the site, along with the latest updates on those topics:
Investors are anxious to know if Tesla is still on track for the release of its lower-cost Model Y, which was initially scheduled for the first half of this year. A report from Reuters indicates that this model is now delayed by "at least several months," raising concerns about the company's commitment to providing more budget-friendly options.
Musk has been promising the rollout of unsupervised full self-driving technology for the past five years, typically claiming it would be available “next year.” Recently, he stated that regulatory issues, not technical capabilities, are holding back the release. Musk expressed confidence that fully autonomous Teslas would be operational in Austin and other U.S. cities by the end of this year, with hopes of expanding to all of North America next year. However, it appears that full self-driving will initially be limited to Tesla-owned vehicles in Austin, with a projected start date of June.
Tesla's manufacturing strategy offers some insulation against global economic risks, as the company assembles its vehicles in the U.S. This approach contrasts with many competitors who rely on overseas assembly. Nonetheless, Tesla depends heavily on parts sourced internationally. The imminent auto parts tariffs could adversely affect the company’s pricing and profit margins. Recently, Tesla suspended shipments of Cybercab and Semi parts from China due to the burdensome tariffs.
As of now, Tesla appears to be on track to launch paid Cybercab rides in Austin by June. However, skepticism remains, particularly after internal analyses indicated that the self-driving taxi service may never achieve profitability. Competitors like Google’s Waymo have already made significant strides in this area, raising questions about Tesla's competitive edge.
The first quarter saw Tesla experience its largest sales drop ever, with many analysts attributing this decline to brand damage linked to Musk’s government role and subsequent protests. Analyst Dan Ives warned that this brand damage could cause a permanent demand reduction of 15% to 20%. Surveys from YouGov revealed that while awareness of Tesla remains high, potential customers seem more inclined to choose brands like Toyota or Honda when considering electric vehicles. Musk himself commented that his current role is costing him significantly.
As Tesla prepares to unveil its earnings report, investors are left grappling with these critical questions and the uncertain future of the company's growth trajectory.
