Tesla Inc. prepares to unveil its first-quarter earnings today, marking a pivotal moment for the electric vehicle (EV) company and its CEO, Elon Musk.
With shares having fallen 44% since the start of the year, Tesla now holds the unwelcome title of the worst-performing stock among the once-dominant “Magnificent Seven” tech companies.
This steep decline has shaken investor confidence, fueled by underwhelming vehicle delivery numbers, mounting geopolitical uncertainty, and concerns about Musk’s focus.
His attention has been divided across multiple fronts, including ventures like SpaceX, cryptocurrency initiatives such as Dogecoin, and ongoing political involvement.
“Investors have started to lose patience with the EV giant,” said Josh Gilbert, Market Analyst at eToro. “Protests at Tesla showrooms, weakening brand loyalty in major markets, and growing backlash from consumers are all contributing to the company’s current downward trajectory.”
Wall Street Expectations and Tesla’s Track Record
Investors and analysts will closely watch tonight’s earnings announcement. Wall Street forecasts expect Tesla to report earnings of $0.44 per share, alongside revenue of $21.43 billion.
Tesla’s earnings record in recent years has been mixed. Out of the last eight earnings reports, the company exceeded expectations only twice. However, on both occasions, the stock responded strongly, registering immediate double-digit increases of 12% and 22%.
Market watchers believe a similarly strong performance this quarter could offer a temporary lift, but long-term confidence will require more than a surprise beat. Tesla’s broader trajectory now depends on strategic updates and clear direction from its leadership.
Geopolitical Risks: Tariffs and Global Exposure
One of the most pressing issues is the potential impact of upcoming 25% U.S. auto tariffs. Analysts expect Tesla’s leadership to address how these measures could affect global operations, especially with the growing risk of retaliatory actions from China.
While Tesla has attempted to mitigate its exposure through local production in the U.S. and China, the latter remains a key market. In 2024, more than 20% of Tesla’s revenue came from China. Any disruption there could have a material effect on the company’s earnings.
Investors are waiting to hear whether Tesla has contingency plans or strategic shifts in place. With U.S.-China trade tensions escalating, clarity on these issues is crucial for forecasting Tesla’s international performance.
Elon Musk’s Public Profile and Brand Risk
Elon Musk’s increasingly visible role in politics and cryptocurrency markets continues to be a double-edged sword for Tesla. His association with Dogecoin and advisory ties to former U.S. President Donald Trump have drawn attention — both positive and negative.
Some investors believe Musk’s political presence may serve as a buffer against tough regulations in the U.S. However, others worry that his alignment with American political interests could damage Tesla’s reputation in other key markets, particularly China.
As Chinese EV manufacturers like BYD gain popularity, especially among nationalist-leaning consumers, Tesla risks losing ground. Analysts are urging Musk to weigh his personal brand’s impact on Tesla’s international strategy.
New Product Pipeline and Innovation Outlook
In the midst of investor anxiety, one potential bright spot remains: Tesla’s upcoming product roadmap. Elon Musk has long teased a new, more affordable EV model, which he claims could transform the company’s market position.
Shareholders are eager for firm details on when this model will be available. Progress updates on Full Self-Driving (FSD) technology and the long-awaited robotaxi service are also expected to feature prominently in the earnings call.
These innovations could help Tesla regain momentum. However, vague timelines or further delays could reinforce skepticism. Concrete milestones will be key to restoring investor faith.
A Make-or-Break Moment for Tesla
“Ultimately, Musk needs to deliver some magic and step up to the plate,” said Josh Gilbert. “He’s done it many times before, but this feels like a crucial moment for Tesla.”
With its stock under pressure and its leadership under scrutiny, Tesla’s first-quarter report has become more than just an earnings release. It’s a moment of reckoning.
Investors, markets, and global competitors will all be watching closely to see whether Tesla can begin to reverse its slide — or if the company’s struggles will deepen through 2025.
