Tesla (TSLA 2.60%) is expected to release its second-quarter earnings in late July, making the stock worth considering for investors who can tolerate some potential volatility. The recent robotaxi launch has altered the narrative surrounding the stock, and Tesla may reveal another event that could prove a positive catalyst for the company and the stock. Here's the lowdown.
Tesla's delivery data
Elon Musk's company typically releases its production and delivery data for the quarter shortly after the quarter has ended, but before the quarter's earnings are reported. That matters because, unlike most other automakers, Tesla's deliveries are its sales volumes in the quarter. Unlike legacy automakers that sell through dealers, Tesla sells directly to consumers, either online or through its stores.
NASDAQ: TSLA
Key Data Points
As such, investors will already be aware of Tesla's sales and production volumes before the earnings release. It's challenging to predict the numbers, and you may be reading them by the time this article is published. There are numerous moving parts here, not least of which is the refresh of the Model Y (the world's best-selling car) , as well as the timing of its availability in various markets.
The bulls and bears battle it out over Tesla stock
The earnings report is likely to reveal data indicating that Tesla lost share in the electric vehicle (EV) market, a trend that has persisted for the past few years. For example, at the end of 2022, Tesla held 58% of the U.S. EV market, a figure that fell to 50.9% by the end of 2023, then to 44.4% by the end of 2024, and finally to 43.5% in the first quarter of 2025.
In addition, sales data from the U.S. and Europe from early in the quarter suggests Tesla is going to need a big sales month in June to stay on track for meeting analyst estimates.
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The bears will argue that this is a consequence of a tired lineup of vehicles, amid concerns that Tesla is losing its competitive edge.
At the same time, the bulls will see it as an inevitable consequence of the fruition of heavy investments by its competitors, while noting that it's unrealistic to expect the kind of market share Tesla had in the past when it's competing with rivals taking heavy losses on every EV sold to win market share. For the bulls, the key to long-term success is Tesla's ability to lower its cost per vehicle, allowing it to increase EV sales and develop its nascent robotaxi business sustainably.
Three potential positive catalysts for Tesla
There's something in both bearish and bullish cases. Tesla investors may be willing to accept a decline in market share, but they won't want to see Tesla's automotive sales continue to decline, as they did in the first quarter with a 20% year-over-year drop. Moreover, Tesla needs to get back to production growth because building scale is usually the best way to lower the unit cost of production, and that's how companies learn how to reduce costs in general.
Image source: Getty Images.
Tesla needs to do this because lower-cost vehicles are an integral part of the case for robotaxis. Whether it's a dedicated robotaxi vehicle like the Cybercab due for volume production in 2026, or existing Tesla EVs transformed into robotaxis using Tesla's as-yet-unreleased autonomous full self-driving (FSD) software.
In this context, there are three things Tesla's management could outline on the earnings call, and they are all likely to be positive for the stock:
- Affirm the plan for volume production of the Cybercab in 2026.
- Details of the potential expansion of the robotaxi pilot program.
- On the earnings call in April, management promised "cheaper models to market soon, with the start of production still planned for June," so presumably it will be able to confirm this in July.
The third event is arguably the most important in the near term. Commercializing robotaxis will take time, and the Cybercab production ramp is understandably tied to that. However, Tesla's release of lower-cost models in 2025 could revitalize its lineup, start boosting sales, and capitalize on its position as a profitable EV maker with a cost structure that makes EVs more affordable to the mass public.
Image source: Getty Images.
A stock to buy
Tesla remains a speculative growth stock, and there's no guarantee that its robotaxi development will be successful. That said, the launch is now history, and the narrative around the company's EV sales and market share could change with the introduction of lower-cost models. If, and it's a big if, Tesla sticks to its timelines, then the stock is worth buying for investors willing to tolerate risk for a substantial reward.
