Elon Musk, who sleeps in the office, is back. Can Tesla's earnings report this week restore market confidence?

On the eve of Tesla's second-quarter earnings report on July 23, Musk returned to his "king of the roll" status, attempting to rebuild market confidence.

On Saturday Eastern Time, Musk posted on social media platform X that if his children were not around, he would return to working seven days a week and sleeping in the office.

Analysts suggest this may be a signal from Tesla to regain market confidence. Over the past few months, Musk's focus seemed to drift away from Tesla. He first publicly supported Trump's candidacy, then briefly joined a federal budget-cutting task force, only to resign and have a falling out with Trump. These political activities distracted him from Tesla and affected the company's business performance, which is significant for a company with a price-to-earnings ratio as high as 180.

Investors will focus on the latest developments in Tesla's autonomous taxi, AI robots, plans to boost vehicle sales, and commitments to lower-priced models. Most importantly, investors want to confirm that Musk is fully committed to Tesla and will continue to be so in the foreseeable future.

What new story can this week's earnings report tell?

Analysts point out that investors are focused on five core questions during Tesla's earnings call.

1. Can Tesla's autonomous taxi catch up with Waymo?

At the end of last month, Tesla finally launched its first autonomous taxi (robotaxi) service in Austin, Texas. Although this is just a test version, using a limited number of Model Y vehicles with safety operators, it marks Tesla's official entry into the autonomous taxi field.

Currently, Waymo, a subsidiary of Google's parent company Alphabet, operates in five major cities in the U.S., far ahead of Tesla. Supporters of Tesla believe that Tesla relies on its FSD system and does not need the expensive lidar used by Waymo, allowing Tesla to scale up faster and at a lower cost.

The key question for investors to consider is how quickly Tesla plans to roll out robotaxis to other cities.

2. Will Tesla invest in xAI?

Last week, Musk's Grok chatbot surpassed Meta's Llama and OpenAI and Microsoft's ChatGPT in pre-training capabilities and reasoning assessments, attracting industry attention. Although Musk denied merging Grok's parent company xAI with Tesla, he hinted at a possible shareholder vote on whether Tesla should invest in xAI. If true, this investment could boost confidence among Tesla shareholders, demonstrating that Tesla is diversifying into the booming AI industry to alleviate the pressure from slowing growth in its core electric vehicle business.

3. Can Tesla's electric vehicle core business stabilize?

2025 will mark the first year in five that Tesla experiences a decline in annual revenue. In 2024, the company also faced its first-ever drop in profit margins due to declining sales and increased promotions. If Musk can convince investors that the most difficult phase has passed, then Tesla's stock price may have room to rise 4. Can Tesla's energy business still "charge" up?

Tesla's energy division is one of the few highlights for the company recently. In 2024, the energy storage deployment volume doubled year-on-year, with revenue growth reaching 67%. Investors will be watching to see if this growth momentum can be sustained.

5. How do tariffs and politics affect Tesla?

Although the global trade landscape seemed to become clearer after President Trump's announcement of tariffs in early April, the specific impact of tariffs on Tesla's profit margins remains uncertain. Meanwhile, after Musk's public spat with Trump, he threatened to establish a new political party. If he takes action, it could negatively affect the stock price. Historical experience shows that investors prefer Musk to focus on running Tesla rather than being distracted by political affairs.

Additionally, investors will be looking for updates on the timeline for new product advancements, including the "Optimus" humanoid robot.

Aside from the above issues, the most important thing for investors is hearing that Musk has fully re-engaged with Tesla and will maintain this focus for the foreseeable future. Historical precedents indicate that investors want Musk to concentrate on company operations, as any external distractions often trigger sell-offs.

Political turmoil has repeatedly dragged down stock performance

Since Musk's high-profile support for Trump's candidacy last July, Tesla's stock price has become increasingly tied to political developments. In July of last year, Tesla's stock price was around $250. Following Trump's victory and market expectations of policy benefits for Tesla, the stock price surged to a historic high of $488.

However, as concerns over trade tariffs intensified and Tesla's sales declined, the stock price fell below $215 in April. Later, Musk's public fallout with Trump and their exchanges on social media further exacerbated the stock's decline. In the first half of 2025, Tesla sold only 721,000 vehicles, a year-on-year decrease of 13%, falling short of Wall Street's expectation of 970,000.

As of last Friday's close, Tesla's stock price was $329.65, down more than 18% year-to-date, but still up over 31% in the past 12 months.

Options market predictions indicate that Tesla's stock price is expected to fluctuate ±7.4% following this earnings report. In contrast, the average price fluctuation after earnings reports in the past few quarters has been around ±10%. In terms of "earnings surprises," Tesla's actual performance has failed to meet market expectations in 6 out of the last 7 quarters. In the most recent 4 quarters, the average "miss" has been -8.33%.

Wall Street expects Tesla's earnings per share for the second quarter to drop to $0.40, down from $0.50 in the same period last year. If the earnings report shows another decline in profits, it will mark the 6th quarter of profit decline in the past 8 quarters.

Despite the pressure on fundamentals, investors are still willing to assign Tesla a high valuation (with a projected price-to-earnings ratio of 180 times in 2025), primarily based on their expectations of Musk's AI innovation capabilities, including the launch of a robotaxi in June, which is expected to go into mass production in 2026 In addition, the "low-priced model" promised by Tesla's management is still one of the key bargaining chips. Although the market has not yet seen the actual vehicle, if it can indeed be realized, it is expected to re-stimulate the mid-to-low-end market