Tesla Ahead of Earnings: Moderate Expectations and Weak Fundamentals

Tesla will publish its Q4 2025 results after the close of trading on Wednesday, January 28. Expectations for the automotive giant’s earnings do not appear to reflect the enormous hopes placed in the company. Referring to Tesla as an “automotive giant” is accurate, but in this context it carries a negative connotation. The company stopped being valued like a car manufacturer long ago, it is valued like a technology company, despite negligible success in that area. At the same time, the company’s fundamentals, the automotive segment that is supposed to serve as the foundation for further, more advanced ventures, are showing clear signs of strain.

Since the last peak, Tesla’s share price has fallen by around 12%, yet it remains very high within its long-term price channel. Previous results do not justify this. In most of the last dozen earnings releases, Tesla disappointed analysts’ expectations on both EPS and revenue. Will it be different this time?

Ahead of the earnings release, Tesla published its vehicle delivery report. In the fourth quarter, the company recorded the largest drop in its history—down 16% year over year. The consensus for vehicle deliveries was around one million units. Tesla managed to deliver only 418,000.

EPS expectations for Q4 are around USD 0.45. This represents a decline of more than 50% compared with 2022. This deterioration is also visible in the company’s margins.

Revenues look somewhat better: the market expects USD 24.7 billion, which is close to the quarterly average. However, this is still lower than in the corresponding periods of 2025 and 2024.

A significant portion of investors has stopped paying attention to financial ratios or hard data. There is a sizeable group of shareholders focused primarily on further announcements regarding the development of FSD and "robo-taxis". Tesla will have great difficulty meeting even these conservative earnings expectations. However, if the company presents promising indicators related to FSD and robo-taxis, it may temporarily sustain current valuations—or even see a rise. The absence of such signals, on the other hand, could lead to a significant sell-off following the earnings release.

Just a few days ago, Tesla introduced changes to access and distribution of its “Autopilot” and FSD, which may allow the company to show growth—if not in FSD subscriptions themselves, then at least in expectations surrounding them.

TSLA.US (D1)

Price has declined from its recent high. A return to growth may be difficult, and there is plenty of room for a correction. Source: xStation5