The EV company’s shareholders want reassurance after it ‘diverted investor attention away from challenges’

A 13% year-over-year drop in Tesla sales has cast a pall over the company’s quarterly earnings this week.

There’s one thing both Tesla Inc. bulls and bears might agree on: The EV maker’s near-term prospects are murky, and this week’s earnings report might to offer some direction for the stock.

Mostly, investors will be looking for reassurance on Tesla sales and hoping to hear more specifics about the company’s future projects, including a cheaper electric vehicle and the start of its robotaxi services in some U.S. areas.

“For the last few quarters, Tesla has skillfully diverted investor attention away from near-term challenges” — which include losing EV market share in its major markets, namely the U.S., China and Europe — “and steered the focus toward longer-term catalysts,” said Garrett Nelson, an analyst with CFRA.

Tesla is scheduled to report first-quarter earnings after the bell on Tuesday, and a call at 5:30 p.m. Eastern time will follow the results. Analysts polled by FactSet expect Tesla to report adjusted earnings of 43 cents a share on sales of $21.45 billion, which would be a tad higher than the $21.3 billion reported for the first quarter of 2024.

The stock has lost more than 40% so far this year, compared with a drop of about 10% for the S&P 500 index.

Tesla earlier this month reported first-quarter sales that were worse than Wall Street’s expectations, which had already been dialed down for weeks before the release. One analyst called it a “disaster.”

Tesla and its stock have lost ground amid growing discontent with Chief Executive Elon Musk’s actions behind the Trump administration’s so-called Department of Government Efficiency, or DOGE, and elsewhere in U.S. and international politics.

Protests against Tesla facilities, vandalization of Tesla vehicles and charging stations, and altercations between protesters and Tesla owners have followed that discontent — leading investors to fear that Musk is alienating Tesla’s customer base with his right-wing politics, and that the company will struggle to rebuild its brand.

For Gene Munster, managing partner at Deepwater Asset Management, investors would do well in basically forgetting about 2025.

This year “is a throwaway year,” he said, one that “sets the stage for a major rebound in 2026 and beyond,” mostly thanks to the company’s artificial-intelligence capabilities.

“Tesla is in a unique position: Its opportunity in physical AI is so compelling that investors are willing to look past what will likely be a difficult year,” Munster said. “In my view, 2025 doesn’t matter; the business is poised for meaningful improvement starting next year.​”

In the short term, Munster believes that Wall Street will react to the first-quarter earnings report by cutting profit and revenue estimates for 2025.

“We’ve seen that Musk’s involvement with DOGE has had a pretty negative impact on Tesla sales and the brand’s image in general,” said Will Rhind, CEO and founder of GraniteShares, an ETF provider.

The one thing that could turn momentum around is the promised lower-cost Tesla model, Rhind said. “If it ends up just being a bare-bones version of the Model Y, we think the Street could be disappointed. Elon really needs to hit the deadline on this and hit the vehicle itself,” he said.

That 13% year-over-year drop in vehicle deliveries in the first quarter “suggests the full-year results probably won’t be good,” he added.

Amid a sea of red for Tesla’s stock in April, a 5% boost on April 2 stood out — and it came following a report that Musk’s days on DOGE might be numbered.

The stock-price jump was indeed thanks to hopes that Musk would refocus on the company, Rhind noted. Still, “the question is how much reputational damage has he done to the brand due to his political aspirations,” he said.

Then there’s tariffs. Wall Street widely believes that Tesla, with two car-making factories in the U.S. and other U.S. plants making batteries and solar-power products, would be better off than other carmakers.

Yet “even if Tesla ends up being comparatively better off, consumers will be impacted by tariffs and that could sap demand for the entire industry,” Rhind said. “That could be the bigger risk.”