For Tesla Inc. (NASDAQ: TSLA), the new fiscal year has been quite challenging, with first-quarter sales falling to a three-year low amid production issues related to Model Y and increasing competition. The company is caught in a political controversy that has damaged its brand image and shaken investor confidence. The stock suffered significantly in recent weeks, even as tensions between CEO Elon Musk and President Trump escalated.
When the electric vehicle giant reports second-quarter earnings on July 23, after the closing bell, analysts will be expecting earnings of $0.44 per share, excluding one-off items, on revenues of $22.7 billion. That represents a decline from the year-ago quarter when the company earned $0.52 per share on revenues of $25.5 billion.
Stock Falls
It has been a dismal show by Tesla’s shares over the past several months, struggling to regain momentum after pulling back from the all-time highs of December 2024. The stock has fallen about 21% since the beginning of 2025. There are concerns over the slow progress in the company’s much-hyped self-driving project and the lack of new product launches. Currently, there are no signs of the stock recovering and regaining its past glory in the near term.
Tesla reported revenues of $19.3 billion for the first quarter of fiscal 2025, lower than $21.3 billion revenue it generated in the year-ago quarter and below analysts’ consensus estimates. The company produced a total of 362,615 vehicles and delivered 336,681 units during the March quarter, down 13% and 16% respectively from the prior-year quarter. Meanwhile, the energy storage business has remained a bright spot, growing an impressive 67% in Q1.
Tesla’s CEO, Elon Musk, said in the earnings call, “…while there are many near-term headwinds for us and the broader industry, the future for Tesla is brighter than ever. The value of the company is delivering sustainable abundance with our affordable AI-powered robots. So, this, I like this phrase, sustainable abundance for all. If you say, like, what’s the ideal future that you can imagine? That’s what you’d want. You’d want abundance for all in a way that’s sustainable. It’s good for the environment. Basically, this is the happy future. If you say what’s the happiest future you can imagine.”
Earnings Fall
The weak sales performance translated into a 40% fall in Q1 adjusted earnings to $0.27 per share from $0.45 per share last year. The number also fell short of the Street’s expectations. Unadjusted net income was $409 million or $0.12 per share in Q1, compared to $1.39 billion or $0.41 per share in the corresponding period of 2024.
Tesla is actively pursuing market expansion, with the latest move being the launch of its first showroom in India. The company is planning to double its dealerships in Japan by the end of next year. The initiatives are significant considering the multiple challenges currently facing the business, including political issues and falling demand. The EV space is witnessing stiff competition, mainly due to the rapid growth of Chinese companies like BYD.
The last closing price of TSLA is well above its 52-week average price of $298.55. The stock traded slightly higher on Thursday morning, extending the momentum seen during the week.
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