Tesla (TSLA.O) investors are anxious to know if plans to roll out a cheaper car and a robotaxi service this year are on track, and whether CEO Elon Musk is ready to ditch his role in the Trump administration soon and get back to managing the company more closely.
The electric vehicle maker is scheduled after market close on Tuesday to provide what is likely to be its most important update on operations since the launch of its Model 3 vehicle in 2017. Tesla said earlier this month that it would "hold a live company update" along with its results and the question and answer webcast, sparking speculation on social media that it might make a major announcement.
Analysts are expecting a bad first quarter, based on recent indicators. Deliveries in the January-March period slid 13%, as the company lost ground to Chinese rivals, and Musk's political actions as a close adviser to U.S. President Donald Trump have damaged the brand.
Tesla has faced protests, vandalism, and consumer calls for boycotts in several markets, and sales in China and California - its largest U.S. market - have fallen sharply as well.
Some investors have taken a more sour view of the one-time Wall Street darling. The company's stock, which closed at $227.42 on Monday, has nearly halved from its December peak.
Tesla's key automotive gross margin, excluding regulatory credits, likely fell to 11.8% in the period, according to 21 analysts polled by Visible Alpha, down from 13.6% in the fourth quarter. Analysts expect the downward trend to continue if Tesla continues to prioritize volume growth over profitability.
“Tesla comes into results as arguably the most scrutinized company in the world," said Matt Britzman, senior equity analyst at Hargreaves Lansdown. "That’s not really a position investors want to be in, and there’ll be a lot of focus on whether Elon Musk gives any indication of when he might be stepping back from DOGE," said Britzman, who personally holds Tesla stock. DOGE is short for the Musk-led Department of Government Efficiency.
The EV maker scrapped plans for a brand-new, low-cost model last year, opting instead to produce cheaper variants using existing platforms and assembly lines. Reuters reported exclusively on Friday that Tesla delayed plans to start production of a more affordable Model Y crossover by at least a few months.
Musk promised driverless ride-hailing services to the public in Texas by June, and in California for later this year. To that end, Tesla has been seeking regulatory approvals, but there are serious concerns about safety and related litigation risks that could come with deploying unproven driverless technology on public streets.
Analysts expect a second straight annual decline in Tesla deliveries in 2025, despite efforts to boost sales through incentives like free charging and Full Self-Driving features.
Revenue was likely flat from a year ago at $21.35 billion, supported by gains in regulatory credits and growth in Tesla’s energy storage business.
Tesla also recalled all Cybertrucks delivered since late 2023 and launched a lower-priced $70,000 version of the vehicle. It has been discounting unsold inventory of the electric pickup truck in recent weeks.
Tariff tensions add further uncertainty. Tesla has paused some China-sourced component imports after U.S. tariffs on the Asian country rose to 145%, Reuters reported. China has responded with tariffs of its own, leading Tesla to suspend new Model S and X orders in the country.
