Tesla (NASDAQ:TSLA) is approaching its second-quarter earnings report facing considerable pressure, with Bank of America signaling that the results are “likely to be challenged due to tariffs and disappointing deliveries.”
In a preview of the upcoming earnings season, BofA analysts positioned Tesla at a disadvantage compared to its Detroit-based competitors.
“Tesla is the most challenged among the three OEMs given disappointing deliveries, IRA incentives phasing out, and tariffs,” the bank noted.
Although Tesla assembles its vehicles in the U.S. and sources a large share of North American parts, BofA pointed out that the company remains exposed to international trade risks.
“The exposure to tariff is not insignificant,” the analysts added, emphasizing Tesla’s dependency on batteries produced in China, especially for its energy division.
Looking ahead, BofA anticipates mixed outcomes in the latter half of the year. “3Q25 may benefit from demand pull forward in the US while 4Q25 may be challenged due to the phase out of IRA incentives,” the firm stated.
On the positive side, Tesla’s push into autonomous driving continues to advance with the recent rollout of its Robotaxi service in Austin, Texas.
“This gives us more confidence on the promise to deliver unsupervised FSD by the end of 2025,” BofA said, though it cautioned the launch holds “immaterial financial ramifications in the immediate term.”
Despite short-term obstacles, Bank of America raised its price target for Tesla shares to $341 from $305, citing a stronger cash position and revised valuation metrics. The firm maintained its Neutral rating.
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