Tesla set to report first-quarter results after the bell

Tesla is set to unveil its first-quarter earnings on Wednesday, with Wall Street analysts keenly monitoring the results. Estimates from LSEG indicate that the electric vehicle manufacturer has struggled this year, with its stock plummeting 14% as of Tuesday's close. This downturn is primarily attributed to disappointing sales in its core automotive sector, while the S&P 500 index has shown a modest increase of over 3%. Analysts are projecting a revenue growth of approximately 17%, rising from $19.3 billion in the same quarter last year. If achieved, this would mark Tesla's strongest growth period since mid-2023. However, the past year has presented significant challenges, especially with fierce competition from brands like China's Xiaomi and BYD, which provide advanced yet more affordable EV options, overshadowing Tesla's aging lineup. Additionally, Tesla has been navigating a consumer backlash linked to CEO Elon Musk's political engagements and controversial statements. Earlier this month, the company reported 358,023 vehicle deliveries for the first quarter, reflecting a 6% increase year-over-year but a decline compared to the previous quarter. This marks a continuation of annual drop-offs experienced over the last two years. In an effort to shift focus, Musk has been emphasizing advancements in self-driving technology and humanoid robots. Although Tesla is currently testing a limited number of driverless vehicles in its ride-hailing service in Texas, the bulk of its revenue still relies on traditional EV sales, and the company has yet to introduce a fully autonomous robotaxi. Presently, Tesla offers a Full Self-Driving (FSD) system for $99 monthly, which necessitates human supervision at all times. Recent updates indicate that Tesla secured permission to market a version of its supervised FSD in the Netherlands and is pursuing broader regulatory approval across Europe. In its latest deliveries report, Tesla revealed it deployed 8.8 gigawatt-hours of battery energy storage systems in the first quarter, falling short of the 14.2 gigawatt-hours recorded in the previous quarter, which disappointed investors. Musk has also been occupied with merging his aerospace firm SpaceX with his artificial intelligence initiative xAI in a deal valued at an impressive $1.25 trillion, with preparations underway for a potential record IPO. In January's earnings report, Tesla disclosed a $2 billion investment in xAI, which was subsequently converted into SpaceX shares. The two companies are collaborating on various projects, including a Terafab chip manufacturing facility in Texas and integrating xAI's Grok models into Tesla's vehicles and robotics. As the earnings call approaches, investors have submitted questions regarding the collaboration between Tesla and SpaceX, the future of their potential merger, and specifics about Tesla's long-awaited driverless technology. Additionally, shareholders are eager for updates on the Optimus humanoid robot's latest version and Tesla's ride-hailing operations, where it lags behind Alphabet's Waymo in the U.S. and Baidu's Apollo Go in China. Currently, Tesla's Robotaxi service primarily relies on human drivers in California, with plans to expand into Dallas and Houston.