Tesla is set to release its second-quarter earnings report, and this time Wall Street is looking beyond just profitability figures. While a recovery in vehicle deliveries marks the first step, investors are more eager to understand whether Elon Musk’s bets on autonomous driving, humanoid robots, and artificial intelligence infrastructure are already sufficient to justify the company’s future valuation.
$Tesla (TSLA.US)$It will release its second-quarter 2026 earnings after the U.S. stock market closes on Wednesday. Market focus is shifting from the recovery in vehicle sales to the company’s future growth model.
On one hand, the automotive business has rebounded, driven by improved deliveries and restored production capacity; on the other hand, continued investments in artificial intelligence infrastructure, humanoid robots, and autonomous driving projects have made cash flow pressure a new focal point for the market.
According to Bloomberg consensus estimates, Tesla’s second-quarter revenue is expected to reach $26.21 billion, up 16% year-over-year; adjusted earnings per share are projected at $0.50, and adjusted EBITDA is forecast at $4.0 billion, significantly higher than approximately $2.3 billion in the same period last year.
Vehicle deliveries have become a key driver of improved performance. Tesla previously reported that global deliveries reached 480,126 units in the second quarter, up 25% year-over-year and substantially exceeding the Bloomberg consensus estimate of 397,466 units.
The energy business also delivered strong results. Tesla deployed 13.5 GWh of energy storage in the second quarter, an increase of over 50% compared to 8.8 GWh in the first quarter, making it one of the company’s significant growth contributors.
Model Y resumes production, with global sales showing divergence
The improvement in Tesla’s automotive business primarily stems from the successful ramp-up of production for the new Model Y.
A year ago, Model Y production was disrupted due to manufacturing line adjustments, which constrained market supply. This year, with production capacity restored, the company can more fully meet consumer demand.
Pricing strategies have also boosted sales. Tesla has continued implementing price reductions across global markets, to which consumers have responded positively.
Meanwhile, the market believes that political factors related to Elon Musk are having a diminishing impact on sales. Although Musk continues to express controversial political views, his previously promoted 'Department of Government Efficiency' initiative has concluded, leading some consumers to pay less attention to these issues.
Gene Munster, an analyst at Deepwater Investment, stated, “The EV winter that began in March 2024 has ended,” adding that high oil prices and reduced headwinds related to government efficiency initiatives have also become key drivers of improved sales.
However, Tesla’s market performance varies significantly across regions.
The U.S. market may be affected by the expiration of federal electric vehicle tax credits. Cox Automotive forecasts that Tesla’s U.S. sales could decline by 20% due to the loss of these incentives. In contrast, the European market is emerging as a growth driver. In May, new vehicle registrations in Greater Europe surged by nearly 108% year-over-year, with registrations in the EU more than doubling.
Buoyed by strong demand in Europe and international markets, Tesla has announced plans to increase output at its Berlin Gigafactory. Tesla’s German subsidiary stated in its 2025 annual report: “For fiscal year 2026, the company expects production volume to rise significantly compared to the prior year, with a corresponding increase in capacity utilization.”
AI investment expansion,Free cash flowhas become a key indicator.
The recovery in automotive business has not fully alleviated investor concerns. Ahead of Tesla’s earnings release, one of the most closely watched metrics has been the company’s free cash flow.
According to consensus estimates from sell-side analysts, Wall Street expects Tesla’s free cash flow for the second quarter to fall to negative $3.254 billion, while quarterly capital expenditures are projected to rise to $6.7 billion. By comparison, the company reported free cash flow of nearly $5.6 billion during the same period last year.
Cash pressure primarily stems from the simultaneous advancement of multiple long-term projects, including production of the Optimus humanoid robot, construction of artificial intelligence data centers, and development of the Cybercab autonomous ride-hailing vehicle.
These initiatives are viewed as critical pillars supporting Tesla’s high valuation, yet they require sustained substantial investment—just as the automotive business is beginning to regain momentum.
Morgan Stanley analyst Andrew Percoco previously wrote in a client report:
“Strong deliveries in automotive and energy contributed to a solid quarter for Tesla, but we believe the core issue investors are focused on remains unchanged: Are Robotaxi and Optimus advancing quickly enough to justify the accelerating pace of AI investment?”
He noted that with capital expenditures more than doubling and free cash flow turning negative, investors are increasingly concerned about whether Tesla’s investments will truly strengthen its physical AI moat.
Disagreements over the company’s future strategy have also weighed on its stock performance. Tesla’s shares have declined approximately 16% year-to-date.
Investors remain cautious about the earnings report. According to Bloomberg data, Tesla has missed adjusted earnings-per-share expectations in five out of the past eight quarters.
Options markets bet on high volatility following earnings
Ahead of the earnings release, options markets are reflecting investor expectations of significant stock price volatility for Tesla.
Data shows that the implied volatility corresponding to current at-the-money put and call optionsoptions prices.has reached 5.76%, the highest level since traders bet on 6% volatility in October 2025. If realized volatility reaches this level, it would mark the largest post-earnings stock price move since last July.
As of Tuesday’s midday trading, traders bought approximately 244,000 call options compared to 116,000 put options, with calls accounting for more than two-thirds of total option premium volume.
By trading volume, Tesla’s three most actively traded options contracts are all calls. The most heavily funded is the $380-strike call expiring this Friday. Traders paid over $15 million for these near-the-money options—at roughly $11 per contract—meaning Tesla’s share price would need to rise about 3% by the end of this week for these options to become profitable.
However, historical data indicate that Tesla’s actual post-earnings volatility has typically been lower than market expectations. According to$Cboe Global Markets (CBOE.US)$Data show that over the past four quarters, the median post-earnings stock price movement for Tesla has been only 3.5%.
In addition to Tesla’s own performance, investors tracking Elon Musk–related assets will also be watching$SpaceX (SPCX.US)$the first earnings report following its initial public offering. SpaceX plans to release its earnings on August 4, and options markets are pricing in approximately 12% two-way volatility around that date.
Gianni Di Poce, instructor at TheoTrade, stated:
“If you’re willing to adopt a more aggressive strategy, you could argue that Tesla is holding its groundsupport leveland go long. I’m also bullish in the long term, but since the beginning of this year, it has largely been trading in a range.”
He also noted that the entire SpaceX situation is exerting downward pressure on the stock price, as the market tries to assess which company to hold and whether the two might eventually merge.
Following its record-breaking IPO in June, SpaceX’s valuation briefly approached $2 trillion, but the share price subsequently pulled back. The company is now valued slightly below $1.7 trillion, above Tesla’s current valuation of approximately $1.4 trillion.
Editor/Rocky