Tesla (TSLA) Earnings: Can Cash Burn Fuel Growth?

As Tesla (TSLA) spends on automated taxi expansion and software growth applications, traders and investors will be watching second quarter financial results Wednesday to see if its cash burn can fuel tangible results.

The electric vehicle giant announced Tuesday that it is expanding robotaxi service in Florida. This adds to its expanding U.S. pilot fleet testing the safety of its full-self-driving (FSD) technology, including “supervised” versions, in Texas and the San Francisco area.

Tesla shares were up more than 2% Tuesday to $378.93, but the stock has fallen 24% from its high of $499.68 reached in December. Options markets imply a potential stock-price move of about +/-5.5% or $20.80 after the report.

Here are three things to watch when Tesla reports 2Q earnings after Wednesday's closing bell:

Measuring Up: Profit Margins, EV Demand and Share?

Of its $94.8 billion in 2025 revenue, Tesla generated the majority ($69.5 billion) from making and selling Model 3 and Model Y electric vehicles, and its Cybertruck. On July 2, Tesla said it produced 451,758 vehicles in the second quarter and delivered 480,126. That reverses some negative trends in the first quarter, when Tesla said it delivered 358,023 vehicles, missing a reduced target of 372,160. It was left with roughly 50,000 vehicles, a record inventory, according to reports.

Tesla also is selling more energy storage, which accounted for about 14% of revenue. The company pre-announced second quarter deployment of 13.5 gigawatt-hours (GWh) of energy storage products, including lithium-ion battery energy storage and commercial and residential battery systems. This represents a year-over-year increase of 40%, according to reports, following a first quarter decline, year-over-year, to 8.8. GWh. Zacks expects Tesla earnings per share of 50 cents per share on revenue of $25.8 billion for the quarter, and $2.15 per share for the full year on revenue of $103.3 billion.

Cash Burn Rate - How Will TSLA Fund Growth?

Back in 2022, when markets were anticipating the 2023 release of the Tesla Cybertruck, Tesla free cash flow peaked at roughly $38 billion. FCF declined to about $6 billion in 2025, and estimates call for mounting negative free cash flow. Bank of America analysts project negative TSLA FCF of $10.3 billion for 2026. Despite the cost of a capital raise, should the current pattern continue, BofA analysts see that as a potential way to accelerate growth, combined with cost containment. BofA has a Buy rating on TSLA stock with a $460 price target, which is roughly 21% above the current price. 

For Tesla, demand could get a boost if the U.S. war with Iran keeps gasoline prices high, government incentives boost electric car purchases, and Tesla can attract buyers despite cheaper competition. This is especially true in China and Germany, Tesla's international manufacturing hubs. In the U.S., Tesla manufactures in California, New York, Texas and Nevada. Industry EV average transaction prices, according to BofA, are “flattish on a trailing 12-month basis,” based on Kelley Blue Book data. As EV affordability comes into focus, the spotlight will be on profitability. But the company also could boost lease rates to draw in customers.

Are Autonomous Driving and Robotaxis Gaining Scale?

The Tesla robotaxi and the Optimus project, Tesla's entry into the humanoid robot market, are another ding on cash but also a source of potential growth.

Progress has been slower than many analysts -- and Tesla co-founder CEO Elon Musk himself – have hoped for, according to reports. Waymo, the Alphabet (GOOGL) robotaxi subsidiary and competitor, is formidable. Still, the safety of autonomous vehicles means a significant amount of brand risk.

The question remains: Can Tesla's autonomous-driving technology and robotics ambitions eventually unlock new, high-margin revenue streams?

This material is intended for informational purposes only and should not be considered a personalized recommendation or investment advice. Investors should review investment strategies for their own particular situations before making any decisions.

Schwab Network is brought to you by Charles Schwab Media Productions Company (“CSMPC”). CSMPC is a subsidiary of The Charles Schwab Corporation and is not a financial advisor, registered investment advisor, broker-dealer, futures commission merchant or forex dealer member.

Charles Schwab Media Productions Company and all third parties mentioned are separate and unaffiliated, and are not responsible for one another's policies, services or opinions.

Data contained herein is obtained from what are considered reliable sources. However, its accuracy, completeness, or reliability cannot be guaranteed. All events and times listed are subject to change without notice.