Tesla (TSLA) recently reported a year-over-year drop in second-quarter deliveries, but the results weren’t as bad as expected. Contrary to expectations, the market reacted positively, sending the stock up 5%, a sign that investors may be looking past short-term weakness and focusing on what’s ahead. With the Q2 earnings report due on July 23, all eyes are on whether Tesla can deliver a few positive surprises that could reignite momentum for the rest of 2025.
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Q2 Miss Isn’t a Blowout for Tesla
In Q2 2025, Tesla delivered 384,122 vehicles, down 14% from a year ago, but close to analyst estimates of around 387,000. Though that headline figure sounds disappointing, it actually came in above some of the most bearish estimates on the Street.
Beyond vehicles, Tesla’s energy storage business continued to grow, with 9.6 GWh in deployments in Q2, slightly below the previous quarter. With rising global demand for grid-scale batteries, this could become a steady earnings driver in the quarters ahead.
Tesla Expands into Autonomy
But the big excitement is around self-driving technology. Tesla has started testing its robotaxi service in Austin, and CEO Elon Musk has expressed strong enthusiasm about the progress.
This push into autonomy is starting to catch analysts’ attention. One firm, Benchmark, recently raised its price target on Tesla to $475 from $350, pointing to the future potential of its driverless cars and AI systems developed in-house.
Challenges Remain
However, there is no denying that Tesla continues to face serious headwinds. It is losing ground to Chinese rivals like BYD (BYDDY), especially in key overseas markets. Domestically, Musk’s political commentary has hurt brand perception, particularly among younger and more liberal buyers. On top of that, federal EV tax credits are fading, which could impact U.S. demand in the second half.
That said, Tesla has the resources to stay aggressive. As of March 31, 2025, Tesla held approximately $37 billion in cash and cash equivalents, marking a 37.7% increase year-over-year. This gives the company enough flexibility to ramp up new models, invest in AI, and fund future battery innovations, even in a tougher market.
What to Watch on July 23
Tesla’s upcoming earnings call will be closely watched for updates on margins, production costs, and any guidance around its next-gen compact EV. If Musk drops new details on the robotaxi platform or signals acceleration in Full Self Driving (FSD) adoption, it could spark another round of investor enthusiasm.
Wall Street analysts expect the company to post earnings of $0.42 per share, down 19% from the year-ago quarter. Meanwhile, revenues are expected to decrease by about 11% from the year-ago quarter to $22.72 billion, according to data from the TipRanks Forecast page.
What Is the Price Target for Tesla Stock?
Overall, Wall Street is sidelined on Tesla stock, with a Hold consensus rating based on 14 Buys, 12 Holds, and nine Sell recommendations. The average TSLA stock price target of $291.31 indicates 8.30% downside risk from current levels.
