Cantor Fitzgerald Comments on Tesla’s Q2 Earnings Report
Cantor Fitzgerald analyst Andres Sheppard reaffirmed on July 24, 2025, Tesla’s ‘Overweight’ rating and $355 price target.
“While Revenue and Gross Margins came in above sell-side expectations, we see TSLA’s Q2 print as “mild,” given FCF missed by ~$200M (vs. consensus), and given management did not provide an update on its annual company guidance, or further granularity in its expansion of its robotaxi fleet.
Recall TSLA was previously guiding for its automotive guidance to “return to growth” in FY25, and for its Energy storage business to grow “by at least 50%.”
With regard to its outlook, TSLA noted on 7/23 that “It is difficult to measure the impacts of shifting global trade and fiscal policies on the automotive and energy supply chains,” and that actual results will “depend on a variety of factors.”
As such, it is now unclear what TSLA expects for total annual vehicle deliveries, or its energy output for the full year.
Nonetheless, we are encouraged by: the reaffirmation of the company’s lower-priced vehicles (began production in June), the introduction of Cybercab (remain on-track for 2026), and by the improving Gross Margin (ex. regulatory credit) of 15.3% (above Sell-Side expectations of ~13%).
Overall, we remain bullish on TSLA ahead of key material catalysts including: Robotaxi Expansion to new cities (we expect 4Q25), rollout of FSD in China (started in 1Q25, and management is targeting a broader release of Supervised FSD this year), rollout of FSD in Europe (management is targeting “this year” pending regulatory approval, we expect 4Q25/2026), high volume production of Optimus Bot (2026E), initial deliveries of Optimus to customers (we expect 2027E), and introduction of Semi Truck (we expect SOP in 2026 and for TSLA to enter the self-driving trucking industry this decade).
We continue to see future revenue upside from FSD, Robotaxi, Energy Storage & Deployment, and Optimus Bots, to be fundamental to TSLA’s thesis over the long term.
Lower Priced Vehicle, Cybercab, and Semi “On-Track”
TSLA disclosed that plans for new vehicles to launch this year remain on track.
This includes plans for initial production of lower-priced vehicles, which started in June, according to management.
We are encouraged by this and expect a lower-priced vehicle will help boost Tesla’s demand, which has been decreasing (particularly in Europe and China), though the company has not yet unveiled this vehicle.
Additionally, TSLA reaffirmed that volume production of its Cybercab (no steering wheel or pedals), and development of Tesla’s Semi remain on-track for volume production in 2026.
Latest on Robotaxi – Plans to Ramp up in Austin and Expand to CA Next
TSLA began operating its robotaxi service in Austin on 6/23, with unsupervised Model Y vehicles carrying select passengers for a flat fee of $4.20 per ride.
Initial rides excluded trips to and from the airport, were limited in days of inclement weather, and included a Tesla safety monitor sitting in the front passenger seat during the rides.
Additionally, on 6/27, TSLA announced that it had completed its first fully autonomous delivery to a customer, in which a Tesla Model Y drove autonomously from the Austin Gigafactory to the customer’s driveway (approx 30 mins) with zero human intervention.
On its 2Q25 call, TSLA noted that it now plans to expand the service in Austin (more vehicles and a larger area) over the next few weeks, subsequently remove the safety rider, then launch in additional cities.
Recall that on 7/10, TSLA announced its intention to expand its robotaxi service to the San Francisco Bay Area, and to Arizona (Bloomberg reported that TSLA had contacted Arizona’s Department of Transportation to begin the certification process).
In our view, we expect Robotaxi expansion into the Bay Area (by Q4), followed by Arizona, Nevada, and Florida, subject to regulatory approvals.
Tesla is then planning to roll out its Cybercab in 2026.
Overall, we continue to see Tesla’s Robotaxi segment as a software-as-a-service, high-margin model, and we expect TSLA to have the ability to rapidly scale following commercialization.
We expect TSLA will capture a leading market share in these industries.
2Q25 Key Financial Highlights: Top-Line
TSLA reported 2Q25 revenue of ~$22.5B, above aggregated sell-side consensus of $21.8B (and vs. 2Q24 revenue of ~$25.5B), driven by 384,122 vehicle deliveries.
TSLA reported 2Q25 Adj. EBITDA of ~$3.4B.
Energy Generation and Storage Update
TSLA reported ~$2.8B revenue from its Energy Generation and Storage Business in 2Q25 (vs. ~$3B in 2Q24), driven by deployment of 9.6 GWh, which was below consensus of 11.8 GWh, (and vs. ~9.4 GWh in 2Q24 and vs. ~10.4 GWh in 1Q25).
Gross Margin Beat
Tesla reported 2Q25 GAAP gross margin of 17.2%, above our estimate/Sell-side consensus of ~16.6%/16.6% and a gross margin (ex-regulatory credits) of 15.3% vs. Sell-Side expectations of ~13%.
Bottom-Line
TSLA reported 2Q25 Non-GAAP diluted EPS of $0.40 above/in-line with aggregated sell-side consensus of $0.39.
Free cash flow was $146M in 2Q25, below our estimate/Sell-side consensus of $418.6M/$356M.
Valuation
Our Overweight rating and $355 PT are unchanged.
We arrive at our valuation via a 10-year bottom-up DCF.
In our model, we are lowering our vehicle delivery assumptions in FY25/FY26 to ~1.66M/~1.98M, respectively, from ~1.78M/~2.21M, respectively, resulting in lower Automotive revenues of ~$70.4B/~$80.8B, from prior ~$71.3B/~$89.7B, respectively.
Additionally, we lower our MWh storage deployed assumption for FY25/FY26 to 45,150/65,000 from 50,150/80,000, respectively, driven mainly by tariff impact, which results in lower Energy generation and storage revenues of ~$12.8B/~$18.5B, from prior ~$13.2B/$21B, respectively.
Key Risks Include
- Tariffs,
- Competition from Chinese OEMs,
- Regulatory approval for FSD and Robotaxi,
- Slowdown in EV demand, and
- Removal of EV tax credit.”
This research note is reproduced verbatim from the issuing firm. Price Target never edits, paraphrases or alters analysts’ words — we only republish them in one place.
