Electric carmaker Tesla TSLA is gearing up to report results for the first quarter of 2025 today after market close.

Tesla has plunged about 44% so far this year compared with the industry’s decline of 28.5%. The company is facing its biggest crisis in years amid waves of protests, boycotts and criminal acts in response to CEO Elon Musk’s political antics and work in the Trump administration. Musk’s active involvement in the Trump administration has dented the automaker’s brand, hurting sales and distracting him from leading the company. Many analysts slashed the target price on Tesla ahead of its earnings report. 

The weak trend might reverse if Tesla hints at any good news, as all the negative things have already been priced in. However, the first-quarter earnings picture is not assuring.

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ETFs having a substantial allocation to this luxury carmaker like Simplify Volt TSLA Revolution ETF TESL, The Nightview Fund NITE, Consumer Discretionary Select Sector SPDR Fund XLY, Vanguard Consumer Discretionary ETF VCR and Fidelity MSCI Consumer Discretionary Index ETF FDIS are in focus ahead of the company’s first-quarter earnings.

Q1 Earnings Look Bleak

Tesla has an Earnings ESP of -4.93% and a Zacks Rank #4 (Sell). According to our methodology, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The electric carmaker saw negative earnings estimate revision of a penny over the past seven days and 9 cents over the past 30 days for the to-be-reported quarter. The Zacks Consensus Estimate for first-quarter earnings indicates a substantial year-over-year decline of 2.2% and revenue growth of 0.95%. The earnings track record of the company is not good, as it has missed earnings estimates in three of the last four quarters.

Tesla, Inc. Price, Consensus and EPS Surprise

Tesla, Inc. price-consensus-eps-surprise-chart | Tesla, Inc. Quote

The EV maker currently has a Wall Street analyst recommendation of 2.65 on a scale of 1 to 5 (Strong Buy to Strong Sell) made by 42 brokerage firms. Of these, 16 are Strong Buy and three are Buy. Strong Buy and Buy, respectively, account for 38.1% and 7.14% of all recommendations. Based on short-term price targets offered by 34 analysts, the average price target for Tesla comes to $338.00, ranging from a low of $120.00 to a high of $550.00.

Tesla’s Dismal Q1 Delivery Numbers

Tesla reported its worst quarter of sales in three years. The leading electric carmaker delivered 336,681 (323,800 Model 3/Y and 12,881 other models) cars worldwide in the first quarter. The figure declined 13% from the year-ago quarter and missed the Bloomberg estimate of 390,342, making it the worst quarter for deliveries since the second quarter of 2022. This has put the company’s full-year forecast for a return to volume growth at risk (read: Tesla Sees Worst Vehicle Sales in 3 Years: ETFs in Focus).

With this, Tesla also lost its crown as the world’s largest EV maker to Chinese EV maker BYD, which has sold 416,388 EVs in the same period.

Tesla produced 362,615 (345,454 Model 3/Y and 17,161 other models) vehicles during the quarter.

What to Watch

Investors will be keen to watch Tesla's progress in autonomous driving, its plans for a robotaxi network, and how tariffs impact its profitability. Updates on Elon Musk's role in the White House will also be closely watched. 

On the last conference call, Musk announced that the company would launch its first robotaxi service in Austin this June, aiming to compete with Waymo. He added that Tesla plans to expand the service to additional cities before the end of the year. Musk also set an internal goal to build 10,000 Optimus humanoid robots, while executives projected that the first builds of Tesla’s semitruck design would be completed by the end of this year. Now, three months later, everything is falling apart.

The Trump administration’s gigantic 145% tariffs on Chinese imports are expected to hit a quarter of the vehicles Tesla manufactures in the United States, thus weighing on profitability (read: Here's Where Tesla Stands Amid Auto Tariffs: ETFs in Focus).

Analysts Cut Target Price Ahead of Q1

Many analysts have lowered their target price ahead of first-quarter earnings, underscoring their waning confidence in the electric vehicle maker. Barclays cut its price target on Tesla to $275 from $310, citing softening fundamentals. Earlier in the month, analysts at UBS and Mizuho slashed their target price on Tesla, citing the potential of tariffs to weaken the broader auto industry.

ETFs in Focus

Simplify Volt TSLA Revolution ETF (TESL): It uses an active management strategy to capture the potential of Tesla’s stock price movements while implementing an advanced options overlay to manage downside risks.  

The Nightview Fund (NITE): Tesla accounts for 18.9% of the portfolio.

Consumer Discretionary Select Sector SPDR Fund (XLY): Tesla makes up for 18.1% of the portfolio.

Vanguard Consumer Discretionary ETF (VCR): Tesla accounts for 13.3% of the assets.

Fidelity MSCI Consumer Discretionary Index ETF (FDIS): Tesla accounts for 13.4% of the portfolio.

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Tesla, Inc. (TSLA) : Free Stock Analysis Report

Consumer Discretionary Select Sector SPDR ETF (XLY): ETF Research Reports

Vanguard Consumer Discretionary ETF (VCR): ETF Research Reports

Fidelity MSCI Consumer Discretionary Index ETF (FDIS): ETF Research Reports

This article originally published on Zacks Investment Research (zacks.com).

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