Investor's Corner
Tesla Q2 2018 earnings preview: Layoffs, auto revenue, cost of Model 3 ramp
All eyes will be on Tesla’s pace toward profitability on Wednesday, August 1 when the Silicon Valley company, led by CEO Elon Musk, releases its second quarter financial results after the closing bell. With the electric car maker meeting Musk’s self-imposed Model 3 weekly production target for the second quarter practically by the skin of its teeth, there is a good chance that Q2’s financial results will trigger even more volatility in Tesla’s stock (NASDAQ:TSLA). Here then, is a preview of what we can expect for Tesla’s Q2 2018 financial report and earnings call.
Automotive Deliveries and Revenue Impact
Tesla revealed Q2 deliveries totaling 40,740 vehicles, of which 18,440 were Model 3, 10,930 were Model S, and 11,370 were Model X when it released its production and delivery report earlier this month. Based on the company’s figures, the second quarter results are set to highlight the record deliveries for the Model 3, 10,000 more units compared to Q1. Charts displaying these could be viewed below, courtesy of Galileo Russell of YouTube’s HyperChange TV.
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- Tesla’s vehicle deliveries. [Credit: Galileo Russell]
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- Tesla’s Model 3 deliveries. [Credit: Galileo Russell]
Tesla posted revenue of $2.56B in Q1 for vehicle sales, including 8,182 Model 3s that were delivered to customers during the three-month period. Assuming that the additional 10,000 Model 3 delivered in Q2 averaged $55,000 per unit, Tesla could post an additional ~$550 million in earnings from the electric car. Revenue from Tesla’s vehicle leasing business likely remained flat considering that the lending option is not available yet for the Model 3. Service revenue could see a spike in Q2, however, as a result of more Model 3 vehicles being on the road.
The Price of the Model 3 Ramp
Tesla focused largely on the Model 3 ramp during Q2 2018, with the company pulling out all stops to hit its milestone of producing 5,000 Model 3 per week by the end of June. In order to achieve its target production rate, Tesla adopted unorthodox measures such as air-freighting robots and equipment from Europe and setting up an entirely new Model 3 assembly line on the grounds of the Fremont factory. These strategies likely resulted in additional expenses for the company in the second quarter. With the Model 3 ramp as a priority, Tesla’s other sources of income, such as its battery storage and solar business likely remained flat compared to Q1 as a result.
The company’s operational expenditure would likely see a slight bump in the second quarter due to the 9% layoffs that Tesla implemented to organize its workforce, considering that the restructuring included severance pay packages to employees who were terminated. In a video outlining his expectations for Tesla’s Q2 2018 results, the HyperChange TV host noted that he believes Tesla would post an estimated $4B in revenue with losses in the ~$500 million range. That’s a 43% increase in revenue compared to Q2 2017, when Tesla posted earnings of $2.8B, but also double the losses of the company’s losses in 2017’s second quarter.
Looking Past Q2’s Aftermath
Overall, Tesla’s Q2 2018 quarter financial results would likely feature similarities with Q1, in the way that the company would show strong growth but post substantial losses and negative cash flow. Nevertheless, it is pertinent to note that while Q2 2018’s numbers could be discouraging, the quarter could be seen as a turning point for Tesla, especially with regards to its Model 3 ramp. The past quarters, Q2 2018 included, have been focused on bringing the vehicle’s manufacturing up to 5,000 per week, resulting in the company investing heavily in resources to help scale the vehicle’s production.
With the 5,000/week milestone attained and with Tesla now more focused on sustaining its Model 3 production rate, Q3 2018 would most likely feature a pathway to profitability in the form of more encouraging financials than the second quarter. Provided that Tesla adopts a deliberate, realistic plan for the further ramp of the Model 3, the next few quarters could very well prove to be profitable.
Watch Galileo Russell’s take on Tesla’s Q2 2018 financial results in the video below.
Tesla stock (NASDAQ: TSLA) endured one of its sharpest single-day declines in years on July 23, tumbling approximately 14.5 percent and closing near $320 after opening the session around $374. The drop erased more than $140 billion in market value amid heavy trading volume and left the shares at multi-week lows.
The sell-off followed the company’s second-quarter 2026 results, released the previous evening. Tesla reported record revenue of $28.2 billion, up 26 percent year over year, driven by a Q2-record 480,126 vehicle deliveries. Energy storage deployments also rose strongly.
Tesla (TSLA) Q2 2026 earnings results: miss on EPS, beat on revenue
Yet profitability disappointed sharply. Operating income fell 57 percent to $398 million, compressing the operating margin to just 1.4 percent. Non-GAAP earnings per share came in at $0.33, well below the roughly $0.53 analysts had expected. Free cash flow turned negative by $1.1 billion as capital expenditures surged 142 percent to $5.8 billion, largely tied to accelerated spending on artificial intelligence, robotics, and autonomous systems.
The losses on capex were expected, as Tesla said it would be spending heavily in 2026.
Investors also reacted to lingering uncertainty surrounding key product timelines. During the Earnings Call, management reiterated ambitions for Robotaxi deployment and the Optimus humanoid robot, but offered limited new concrete milestones, renewing questions about execution pace that have long accompanied Tesla’s ambitious roadmap.
The magnitude of the decline places it among Tesla’s more severe one-day percentage losses since its 2010 initial public offering. Historically, the two largest single-day drops (split-adjusted) remain September 8, 2020, when shares fell 21.1 percent amid broader market volatility and valuation concerns, and January 13, 2012, with a 19.3 percent plunge during the company’s early growth struggles.
Other notable declines include an 18.6 percent drop on March 16, 2020, at the onset of pandemic-related market turmoil. Thursday’s move ranks roughly ninth on the all-time list but stands out as the steepest in more than a year.
Despite the short-term pain, Tesla’s long-term trajectory has repeatedly recovered from such volatility. The latest results underscore both the strength of its core automotive and energy businesses and the near-term costs of heavy investment in next-generation technologies.
In a striking revelation that underscores the lucrative crossover between Big Tech and space exploration, Alphabet Inc., Google’s parent company, disclosed a massive $94.1 billion equity stake in SpaceX following the rocket company’s blockbuster initial public offering earlier this year.
The disclosure came in Alphabet’s quarterly filing, marking the first time the long-held private investment has been publicly valued at market prices. Google was an early backer, investing alongside Fidelity in 2015 with roughly $500-900 million at a time when SpaceX was valued around $12 billion.
That bet has delivered extraordinary returns, roughly a hundredfold, transforming a strategic play on satellite internet and launch capabilities into one of Alphabet’s largest assets.
Google, $GOOGL, has said they hold $94 billion in SpaceX, $SPCX, shares after IPO.
— unusual_whales (@unusual_whales) July 23, 2026
Of the total holding, approximately $80 billion remains subject to short-term post-IPO lockup restrictions, preventing near-term sales. An additional $14.1 billion faces longer-term restrictions, extending into the third quarter of 2027. This structure limits immediate liquidity but protects against market volatility as SpaceX transitions into public trading.
The SpaceX position contributed significantly to gains in Alphabet’s broader investment portfolio, which also includes a major stake in AI leader Anthropic. Combined, these holdings helped drive nearly $100 billion in investment gains during the second quarter, providing a substantial boost to net income amid ongoing AI spending pressures.
Analysts view the disclosure as validation of Alphabet’s venture strategy beyond its core search and cloud businesses. The investment aligns with deeper ties, including reported multi-billion-dollar deals for AI computing capacity on SpaceX infrastructure. As SpaceX advances Starship flights, Starlink expansion, and ambitious Mars goals under Elon Musk, Google’s stake positions it to benefit from the commercialization of space.
For Alphabet, the windfall highlights how patient, forward-looking bets in transformative sectors can yield outsized rewards. While lockups temper short-term impact, the holding cements SpaceX as a cornerstone of Alphabet’s diversified portfolio in an era where aerospace, AI, and connectivity increasingly intersect. Investors will watch closely as restrictions lift and SpaceX’s public performance unfolds.
Elon Musk
Tesla Semi finally has an FSD timeline and it’s waiting on the Cybercab
Elon Musk told investors Semi self-driving should start working by early 2027, per today’s earnings.
During Wednesday’s’ Tesla Q2 earnings call, an analyst asked Elon Musk when Tesla would look at autonomy for the Semi. His answer set a real timeline for the first time, noting that self-driving on the Tesla Semi is expected to start working “around the end of this year or early next year”.
Musk framed the delay as a matter of priority, not capability. Tesla’s self-driving team is currently focused on Model 3, Model Y, and Cybercab, the vehicles that make up the overwhelming majority of Tesla’s fleet. Since Semi trucks on the road remain a small fraction of that total even after the recent Nevada factory ramp, Musk said it made more sense to keep the software team’s attention on what he called “the march of nines of safety” for the higher volume vehicles first. Autonomous Semi development is “taking a bit of a backseat for the next six months or so,” he said, before adding that it “will definitely be working next year and in time for the scale-up to high production of the Tesla Semi.”
Tesla Semi’s official battery capacity leaked by California regulators
The timeline lines up with what’s already been showing up on public roads. In June, a Tesla Semi was spotted in Sunnyvale wearing a full validation rig, the same rooftop sensor array Tesla mounts on vehicles ahead of an FSD milestone.
A second unit was seen near Fremont days later with a matching camera suite and lens washers. Separately, Tesla analyst Nic Cruz Patane posted video this month of the production Semi’s exterior camera array, ten AI4 based units built directly into the truck rather than added later.
Tesla Semi AI4 cameras. The production version has 10 cameras on its exterior.
These trucks are designed to be autonomous. pic.twitter.com/GH3BamxIBQ
— Nic Cruz Patane (@niccruzpatane) April 14, 2026
Musk also gave the reason autonomy on the Semi matters in the first place, a persistent shortage of qualified truck drivers. “There is a really serious shortage of truckers,” he said on the call, framing a self-driving Semi as important both for addressing that shortage and for improving safety and comfort for the drivers running the truck today.
The timing also tracks with the Semi’s production reality. Tesla’s Q2 shareholder letter, dropped language promising the Semi would reach volume production this year. Musk pointed to 4680 battery cell output as the near-term constraint on Semi and Cybercab production. A software timeline landing in early 2027 gives Tesla’s autonomy team room to work while the hardware ramp catches up behind it.
It’s worth nothing that this isn’t necessarily a promise the Semi ships driverless next year. Musk’s own language, self-driving “working” by early 2027, describes internal validation catching up to hardware already riding on every production truck, not a public unsupervised rollout.
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