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) just got a price target boost from its biggest bear, Gordon Johnson of GLJ Research, who raised his expected trading level to one that is 95 percent lower than its current trading level.
Johnson pushed his Tesla price target from $19.05 to $25.28 on Wednesday, while maintaining the ‘Sell’ rating that has been present on the stock for a long time. GLJ has largely been recognized as the biggest skeptic of Elon Musk’s company, being particularly critical of the automotive side of things.
Tesla has routinely been called out by Johnson for negative delivery growth, what he calls “weakening demand,” and price cuts that have occurred in past years, all pointing to them as desperate measures to sell its cars.
Johnson has also said that Tesla is extremely overvalued and is too reliant on regulatory credits for profitability. Other analysts on the bullish side recognize Tesla as a company that is bigger than just its automotive side.
Many believe it is a leader in autonomous driving, like Dan Ives of Wedbush, who believes Tesla will have a widely successful 2026, especially if it can come through on its targets and schedules for Robotaxi and Cybercab.
Justifying the price target this week, Johnson said that the revised valuation is based on “reality rather than narrative.” Tesla has been noted by other analysts and financial experts as a stock that trades on narrative, something Johnson obviously disagrees with.
Dan Nathan, a notorious skeptic of the stock, turned bullish late last year, recognizing the company’s shares trade on “technicals and sentiment.” He said, “From a trading perspective, it looks very interesting.”
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Johnson has remained very consistent with this sentiment regarding Tesla and his beliefs regarding its true valuation, and has never shied away from putting his true thoughts out there.
Tesla shares closed at $431.40 today, about 95 percent above where Johnson’s new price target lies.
Tesla (NASDAQ: TSLA) stock received a price target update from Pierre Ferragu of Wall Street firm New Street Research, citing the company’s growing lead in self-driving and autonomy.
On Tuesday, Ferragu bumped his price target from $520 to $600, stating that the consensus from the Consumer Electronics Show in Las Vegas was that Tesla’s lead in autonomy has been sustained, is growing, and sits at a multiple-year lead over its competitors.
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“The signal from Vegas is loud and clear,” the analyst writes. “The industry isn’t catching up to Tesla; it is actively validating Tesla’s strategy…just with a 12-year lag.”
The note shows that the company’s prowess in vehicle autonomy is being solidified by lagging competitors that claim to have the best method. The only problem is that Tesla’s Vision-based approach, which it adopted back in 2022 with the Model 3 and Model Y initially, has been proven to be more effective than competitors’ approach, which utilizes other technology, such as LiDAR and sensors.
Currently, Tesla shares are sitting at around $433, as the company’s stock price closed at $432.96 on Tuesday afternoon.
Ferragu’s consensus on Tesla shares echoes that of other Wall Street analysts who are bullish on the company’s stock and position within the AI, autonomy, and robotics sector.
Dan Ives of Wedbush wrote in a note in mid-December that he anticipates Tesla having a massive 2026, and could reach a $3 trillion valuation this year, especially with the “AI chapter” taking hold of the narrative at the company.
Ives also said that the big step in the right direction for Tesla will be initiating production of the Cybercab, as well as expanding on the Robotaxi program through the next 12 months:
“…as full-scale volume production begins with the autonomous and robotics roadmap…The company has started to test the all-important Cybercab in Austin over the past few weeks, which is an incremental step towards launching in 2026 with important volume production of Cybercabs starting in April/May, which remains the golden goose in unlocking TSLA’s AI valuation.”
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Tesla has transitioned from an automaker to a full-fledged AI company, and its Robotaxi and Cybercab programs, fueled by the Full Self-Driving suite, are leading the charge moving forward. In 2026, there are major goals the company has outlined. The first is removing Safety Drivers from vehicles in Austin, Texas, one of the areas where it operates a ride-hailing service within the U.S.
Ultimately, Tesla will aim to launch a Level 5 autonomy suite to the public in the coming years.
Investor's Corner
Tesla Q4 delivery numbers are better than they initially look: analyst
The Deepwater Asset Management Managing Partner shared his thoughts in a post on his website.
Longtime Tesla analyst and Deepwater Asset Management Managing Partner Gene Munster has shared his insights on Tesla’s Q4 2025 deliveries. As per the analyst, Tesla’s numbers are actually better than they first appear.
Munster shared his thoughts in a post on his website.
Normalized December Deliveries
Munster noted that Tesla delivered 418k vehicles in the fourth quarter of 2025, slightly below Street expectations of 420k but above the whisper number of 415k. Tesla’s reported 16% year-over-year decline, compared to +7% in September, is largely distorted by the timing of the tax credit expiration, which pulled forward demand.
“Taking a step back, we believe September deliveries pulled forward approximately 55k units that would have otherwise occurred in December or March. For simplicity, we assume the entire pull-forward impacted the December quarter. Under this assumption, September growth would have been down ~5% absent the 55k pull-forward, a Deepwater estimate tied to the credit’s expiration.
“For December deliveries to have declined ~5% year over year would imply total deliveries of roughly 470k. Subtracting the 55k units pulled into September results in an implied December delivery figure of approximately 415k. The reported 418k suggests that, when normalizing for the tax credit timing, quarter-over-quarter growth has been consistently down ~5%. Importantly, this ~5% decline represents an improvement from the ~13% declines seen in both the March and June 2025 quarters.“
Tesla’s United States market share
Munster also estimated that Q4 as a whole might very well show a notable improvement in Tesla’s market share in the United States.
“Over the past couple of years, based on data from Cox Automotive, Tesla has been losing U.S. EV market share, declining to just under 50%. Based on data for October and November, Cox estimates that total U.S. EV sales were down approximately 35%, compared to Tesla’s just reported down 16% for the full quarter. For the first two months of the quarter, Cox reported Tesla market share of roughly a 65% share, up from under 50% in the September quarter.
“While this data excludes December, the quarter as a whole is likely to show a material improvement in Tesla’s U.S. EV market share.“
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