Tesla has been the darling of Wall Street for years — but 2025 is shaping up to be one of its most challenging times yet. From falling vehicle deliveries and Cybertruck problems to rising tariffs and political backlash, a lot is happening behind the scenes that could hit Tesla’s earnings harder than many expect.

In this post, I’ll break down 10 major reasons why Tesla’s upcoming earnings report might shock investors — and what it could mean for the stock price. Whether you’re a beginner or a long-time Tesla watcher, understanding these risks could save you from making emotional decisions when the earnings news hits.

Let’s dive into what’s really going on — in plain, simple English.

1. Overall Sentiment is Negative

• Tesla’s vehicle deliveries dropped 13% compared to last year.
• When sales slow down, it usually hurts revenue and earnings.
• Investors are already nervous.

Likely impact: Negative pressure on stock price.

2. Margins Are Getting Hit

• Tesla is offering big discounts (like 0% financing).
• While this can boost short-term sales, it reduces profits per car sold.
• Tesla’s high profit margins were a key reason for its high stock price — and now that's at risk.

Likely impact: Stock price may fall if margins drop more than expected.

3. Brand Image Damage

• Elon Musk’s political opinions have turned off some buyers, especially in places like California.
• Analysts estimate a 15-20% permanent drop in demand from some customer groups.

Likely impact: Lower future sales = lower future earnings = stock pressure.

4. Cybertruck Issues

• Production problems, recalls, and bad customer reviews around the Cybertruck are a concern.
• If Tesla can't fix it quickly, it may have inventory losses.

Likely impact: Negative for earnings.

5. Delayed New Affordable Model

• Tesla postponed its low-cost electric vehicle (EV) model.
• Investors were counting on this to bring new growth.

Likely impact: Lower future revenue growth = stock may fall.

6. Tariff-Related Risks

• The U.S. is increasing tariffs on imported electric vehicles (EVs) and parts, particularly from China.
• While Tesla makes many cars in the U.S., it imports some parts and sells globally.
• If tariffs increase part costs or foreign retaliation hurts Tesla exports, Tesla's production costs go up and sales abroad could drop.
• Also, new tariff rules could impact eligibility for EV tax credits. If Teslas lose tax incentives, they could become less affordable for buyers — cutting sales.

Likely impact: Higher costs + lower demand = downward pressure on profits and stock price.

7. Energy Business is Growing (Positive)

• Tesla's Energy division (solar panels, batteries) grew revenue by over 110%.
• It's a small part of Tesla's business but at least a small positive sign.

Likely impact: Minor positive, but not enough to offset auto weakness.

8. Valuation is Very High

• Tesla’s stock is trading at 96 times earnings, while others are around 25 times.
• High valuation + earnings trouble = greater risk of stock price correction.

Likely impact: Stock could drop significantly if earnings disappoint.

9. Analyst Downgrades

• Several Wall Street analysts have lowered price targets and reduced earnings estimates.

Likely impact: Negative investor sentiment adds more pressure.

10. Small Chance of a Positive Surprise

• If Tesla beats low expectations or announces something exciting like early robotaxi plans, there might be a small rally.
• But it looks unlikely right now.

Likely impact: Low probability of a bounce.

Simple Summary: What to Expect for Tesla's Stock

Most probable outcome: Tesla stock will likely drop after earnings unless there is a major unexpected positive surprise.