Tesla is preparing to deliver its quarterly results after the close of trading, and the setup is unlike any traditional earnings event for a carmaker. Analysts are forecasting adjusted earnings of 36 cents per share, a step up from a year ago, with revenue arriving near $22 billion. But the headline numbers only tell part of the story. The real drama centers on how investors will interpret the company's pivot toward artificial intelligence, autonomous vehicles, and robotics — and how much patience they are willing to extend while the traditional EV business softens.
Why Tesla Is No Longer Judged as a Car Company
There is a recurring theme that has come to dominate any serious discussion of Tesla: treating it as a car company is to misunderstand what investors are actually pricing. The market is looking at robotics, full self-driving, chip manufacturing, and energy storage. Tesla is, notably, a U.S. chip manufacturer in a space where peers like Apple and Nvidia source production overseas. That alone distinguishes it from both auto peers and tech peers.
This multi-business identity matters because the more the conference call emphasizes autonomous driving, the robotaxi program, humanoid robots, chip progress, and energy storage, the more likely the stock will react favorably — provided the commentary is actually positive. The stock is already more than $100 off its recent highs near $500, which sets up the possibility of a genuinely explosive earnings reaction in either direction.
The Bear Case: Fundamentals Are Softening
The other side of the argument is grounded in the numbers. Revenue is expected to decline roughly 9% year over year, and EPS is projected to come in about 14% lighter than a year ago. That tells a clear story on the EV side of the business, which has now posted several quarters of declining sales. The EV segment remains a large chunk of revenue, so this drag cannot be dismissed.
The softness extends beyond vehicles. When Tesla released its quarterly delivery figures, energy storage deliveries fell 15% compared with the same period last year. That is a meaningful negative in a segment that had been growing solidly, and it will likely invite questions seeking clarity.
Valuation is the pressure point these fundamentals create. The multiple is extremely elevated relative to what the company earns on its EV and energy storage operations. But as long-time observers note, Tesla does not always trade on those fundamentals — the narrative around future AI and autonomy businesses has repeatedly overridden traditional valuation discipline.
What Investors Actually Want to Hear
Several specific items are expected to dominate investor attention on the call. The robotaxi rollout, now extending to Dallas and Houston after an earlier announcement, is arguably at the forefront. Production on the autonomous side was supposed to ramp up meaningfully this month, so any update on that cadence will be consequential. The humanoid robot program will likely receive some commentary as well, though that remains further down the timeline.
An update on the Terraab plant is expected, and there have been prior hints about a lower-cost model that investors will want clarified. Also hovering in the background is Tesla's $2 billion investment in xAI, which was acquired by SpaceX back in February. The street will parse any signal about how the various Elon Musk-led businesses interconnect, because that web of relationships increasingly shapes the investment thesis for each individual company.
Trading the Event: Two Approaches with Defined Risk
Given the binary nature of earnings and the stock's propensity for large moves, options strategies offer a way to express a view with bounded risk. The options market is currently pricing a one-day move of roughly $20 in either direction, with an expected move of about $22 extending out to Friday. Two distinct approaches illustrate how different outlooks can be structured.
A Bullish Call Diagonal
The first approach takes a directional, bullish stance through a long call diagonal. The structure involves buying the May 1st weekly 390 call — essentially at the money with nine days to expiration — and selling the April 24th weekly 410 call, which expires in a couple of days. That produces a $20-wide bullish call diagonal aligned with the expected move, entered for a debit of about $10.35 (currently trading slightly lower, closer to $10.10).
The debit paid is the total risk, so the position risks just over $1,000 on a spread that is half the width of the call diagonal. Profitability kicks in anywhere above roughly $395, and because Tesla has multiple weekly option series, there is flexibility to roll the short strike a couple of times before the long May 1st leg expires, potentially collecting additional credits that enhance profitability.
The risk profile peaks at or near $410, where the short call was sold. Importantly, even if Tesla runs up two standard deviations — say $35 to $40 higher — the position remains profitable because it was financed at half the width of the spread. This belongs to the calendar spread family but carries an embedded vertical component, which keeps profits flat and elevated if the stock punches through the $410 strike.
A subtle but important wrinkle makes the structure attractive: the April 24th 410 call being sold is worth over $4 in pure extrinsic premium despite being $20 out of the money. That reflects elevated implied volatility into earnings, and the position benefits from selling a higher-volatility near-term option while buying a lower-volatility option further out in May.
A Neutral-to-Bearish Short Call Vertical
A more passive approach takes the opposite view. Instead of needing an upside move, this position profits if the stock sputters, drifts lower, or even rises modestly but stays below the short strike. The structure sells the April 24th weekly 405 call, about $15 out of the money to the upside, and buys the 415 call, creating a $10-wide short call vertical. The trade collects roughly $2.20 in credit per spread, which is the maximum gain, against $780 in risk.
By placing the short 405 strike inside the expected move, the trade collects more premium than it would at a higher strike. That is the classic trade-off: moving strikes closer to the money increases premium collected but reduces probability of success; pushing them further out boosts probability but shrinks premium. The breakeven on the upside is $407.20.
Comparing the Two
Between the two structures, the short call vertical offers a higher probability of success, but with meaningful defined risk relative to the credit taken in. The bullish call diagonal has a lower probability but more asymmetric payoff if Tesla delivers a sharp upside move. Both are risk-defined strategies, which is the essential discipline when trading a name capable of double-digit percentage moves on earnings.
The Bottom Line
Tesla's earnings report is less about whether it produced a few more vehicles or a bit less energy storage and more about whether the company can keep selling the vision of an AI-powered, autonomy-driven, chip-manufacturing, robotics-adjacent enterprise. The fundamentals suggest pressure on the legacy businesses; the narrative suggests upside if the autonomous and AI initiatives show tangible progress. Between declining EV sales, weakening storage deliveries, a robotaxi rollout spreading to new cities, and a still-elevated valuation, the setup is unusually bifurcated. Whether bullish or bearish, the only prudent way to engage an event this volatile is with a plan — and with risk clearly bounded before the first trade is placed.