At the highest level, Tesla’s revenue can be projected through delivery numbers, with automotive sales likely this year to account for about 75% of total revenue. Services and Energy make up the remaining 25%, contributing roughly 12% each.

Overall Revenue

The substance of the revenue conversation will likely center around high-level commentary, as the company does not provide detailed guidance. I expect the core message to be that things get worse in June, followed by a gradual recovery in the second half of the year. Overall, the guidance will likely point to full-year revenue being down y/y.

Currently, the Street (per FactSet) expects full-year revenue to grow by 9%, a figure I believe is meaningfully above buy-side expectations. My sense is that investors are looking for full-year revenue to grow in the low single digits, which suggests Tesla’s commentary could come in roughly 5% below current whisper numbers.

Automotive Revenue

Since Tesla has already reported deliveries, March automotive revenue is effectively known and is expected to be down about 13%, in line with delivery declines. We believe the company will guide to the June quarter marking the bottom, with a modest q/q deterioration.

We are projecting June deliveries and revenue to decline 15%, compared to the Street’s estimate of a 3% drop. The wildcard is potential upside if demand for the new Model Y surprises to the upside.

Our 2025 delivery estimate: 1.6m units, down 10% y/y.

• March: -13% (reported)

• June: -15%

• September: -10%

• December: -5%

Our delivery outlook for 2025 is based on the following assumptions, in order of importance:

1. The automotive consumer will weaken — all automakers will feel it.

2. Brand damage will continue to negatively impact Tesla’s sales.

3. The new, lower-priced model won’t ship in volume until 2026.

Energy Revenue

Energy has been a bright spot in Tesla’s business, though it has largely been overlooked. We expect it to account for about 13% of total revenue in 2025, driven by strength in utility-scale storage. In December 2024, the segment grew 113%, and we project full-year 2025 growth of 50%.

Services Revenue

In December 2024, Services grew 32%, accounting for 12% of total revenue. We expect 2025 growth of 15%. With the rising number of Teslas on the road, we see this segment sustaining steady growth over the coming years.

2026 is shaping up to be a rebound year, driven by easy comps, brand recovery, renewed EV demand, and the ramp-up in production of a more affordable model.

We forecast 2026 deliveries to grow 35% y/y. While that figure may seem aggressive, here’s the context: a 35% increase on a base of 1.6m units brings us to approximately 2.16m — still about 8% below where the Street had expected 2025 deliveries to be as of April 2024 (2.35m).

Projected 2026 delivery growth by quarter:

• March: +26%

• June: +53%

• September: +45%

• December: +19%

2025

As for earnings in 2025, I expect weaker deliveries to ripple through Tesla’s financials. I now estimate non-GAAP EPS at $2.00, well below the Street consensus of $2.62. This gap reflects reduced fixed-cost absorption, increased discounting, and slower operating leverage.

I expect Tesla’s key profitability metric — Auto Gross Margins excluding Credits —  to come in closer to 12% for March, compared to the Street’s estimate of 13.1%. For reference, the December 2024 margin was 13.6%. We anticipate this metric will dip further to around 11% in June, before beginning to recover in the September and December quarters.

A key factor to monitor in 2025 will be tariffs. Margins could face additional headwinds depending on when and where tariff policies stabilize. This week, Reuters reported that Tesla paused shipments of components from China used in the production of the Cybercab and Semi. Tariffs were flagged as a concern on the December earnings call, and I expect more commentary on this next week. While Tesla has voiced efforts to localize its supply chain in each market, the company remains reliant on parts sourced globally.

2026

In 2026, we expect higher vehicle volumes to drive improvements in Auto Gross Margins excluding Credits. Combining 35% revenue growth with gross margins in the 16–18% range, we arrive at a projected non-GAAP EPS of $3.00–$3.25 for calendar year 2026 — still below the Street’s estimate of $3.60.

What’s most important in the profitability discussion is that, based on our margin assumptions, Tesla continues to generate more than enough earnings to fund its transition to autonomy and real-world AI. As additional reassurance, Tesla ended calendar year 2024 with $37B in cash, cash equivalents, and investments.

I expect Elon’s ability to win over long-term investors will be on full display during the company’s upcoming conference call. The core message: 2025 is a throwaway year — including the delayed ramp of the new lower-priced model, which I now expect in early 2026, roughly a year behind schedule.

This sets the stage for a major rebound in 2026 and beyond. As a result, June results and commentary on the 2025 outlook will largely be viewed as noise. What truly matters is the long-term opportunity: Tesla’s ability to capitalize on the seismic shift toward physical-world AI.

Elon will reaffirm his confidence that this transition is unfolding faster than most expect, and that Tesla’s product lineup is well-positioned to lead throughout the coming decade. Key pillars of this vision include Full Self-Driving (FSD), the Cybercab, ride-sharing, and Optimus.

I remain bullish on Tesla’s ability to execute in the physical AI space. The path forward begins with a reacceleration in deliveries next year and proof-of-concept milestones in ride-sharing later this year. Calendar year 2026 should set the tone for what’s ahead, and I believe EV adoption will continue to gain momentum — especially as Tesla introduces more affordable models.

Disclaimer