Tesla's Best Quarter in Years Isn't Stopping the Stock From Sliding. Here's What Earnings Need to Show
Tesla delivered more than 480,000 vehicles in Q2, a 25% jump year over year and its best second quarter ever. That's genuinely good news after two straight years of declining annual deliveries.
The stock got a brief bounce off the news and then gave it all back. Down 16% over the past four weeks and down more than 42% year to date.
So the delivery numbers were great. The market just doesn't seem to care right now.
That puts a lot of pressure on Q2 earnings, scheduled for July 22. And Deutsche Bank, which still has a Buy rating and a $465 price target on Tesla, just laid out three things that could make the numbers look worse than the delivery count suggests.
The Three Headwinds DB Is Watching
First, those deliveries didn't come free. Tesla ran a 0.99% APR financing promotion on Model Y from May 10-31. Cheap financing costs money. Deutsche Bank estimates that if around 45,000 US buyers took advantage of the deal, it could represent roughly a $180 million hit to profit. Great for moving cars, rough for margins.
Second, Tesla had some one-time benefits in Q1 worth about $230 million from warranty and tariff relief. That doesn't repeat in Q2. DB is treating that as a meaningful headwind going into the print.
Third, Tesla removed the option to buy Full Self-Driving outright. DB estimates that the decision alone is worth about a $200 million revenue headwind for the quarter.
Add those three up and you're looking at some real pressure on the bottom line even with record deliveries in the background.
Despite all that, Deutsche Bank is keeping its Buy. Part of that is the SpaceX merger speculation. DB thinks the possibility of Tesla and SpaceX combining in the next one to two years is becoming a bigger part of how investors are valuing the stock, and expects that topic to come up on the earnings call.
Do you think Tesla's record deliveries are enough to keep you bullish heading into earnings, or are the margin headwinds making you nervous about what the actual numbers look like?
