Tesla (TSLA) will report second quarter results after the closing bell on Wednesday. For the first time in a long while, the car business is not the problem, but increased cash burn could be.
Tesla is expected to report Q2 revenue of $26.21 billion, up 16% from a year ago, per Bloomberg consensus. Tesla's adjusted earnings per share are estimated at $0.50, with adjusted EBITDA of $4.00 billion — a substantial jump from the roughly $2.3 billion posted in the year-ago quarter.
The revenue jump comes after Tesla reported a blowout delivery quarter. The EV maker reported Q2 deliveries of 480,126, up 25% year over and easily topping Bloomberg consensus estimates of 397,466. Energy storage deployments came in at 13.5 GWh, more than 50% above the first quarter's 8.8 GWh.
Several catalysts powered the spike in sales.
The new Model Y is now fully ramped, versus a year ago when the changeover at the factory depressed production. Tesla has also been competing hard on price around the world, and buyers have responded.
And then there's the Elon Musk effect, or the fading of it. Tesla's CEO still spouts off controversial takes and political positions, but his DOGE initiative in the White House is over, and buyers appear to be looking beyond or ignoring his recent past.
Deepwater Investment's Gene Munster added that the end of "the EV winter that started in March of 2024" is a factor, while noting that high gas prices and the DOGE headwinds going away also lifted sales.
Tesla's sales across its important territories are trending in different directions. In the US, the expiration of the federal EV tax credit has hit hard; Cox Automotive sees Tesla's US sales down 20% on the lost incentive.
Europe went the other way, with Greater Europe registrations up nearly 108% in May and EU registrations more than doubling. "International strength is doing the heavy lifting with Europe acting as the standout driver and China providing further support," Deutsche Bank's Edison Yu wrote.
Tesla's European and international outlook is so positive that the company announced it would boost production at Giga Berlin.
"For the 2026 financial year, the company forecasts a significantly higher production volume compared with the previous year and expects a corresponding increase in capacity utilization," Tesla's German unit said in its 2025 annual report last week.
On the flip side, free cash flow (FCF) is the number to watch Wednesday, and it's expected to be deeply negative. Per Tesla's own sell-side analyst consensus estimates, Wall Street sees Q2 FCF dropping to -$3.254 billion as capital expenditures jump to $6.7 billion for the quarter. A year ago, FCF was nearly $5.6 billion.
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