Should You Buy Tesla Stock Before July 23? The Answer Might Surprise You.

Key Points

• Tesla's autonomous driving business could be worth trillions in the future, according to certain Wall Street analysts.

• More than 70% of Tesla's revenue still comes from selling passenger electric vehicles, and this business is suffering a concerning decline.

• Tesla will report its financial results for the second quarter of 2025 on July 23, and they probably won't be great.

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Tesla (NASDAQ: TSLA) is one of the world's largest electric vehicle (EV) manufacturers, but many Wall Street analysts are more focused on emerging products like its full-self driving (FSD) software and its Optimus humanoid robot. In fact, the company's EV business appears to be in decline right now.

On July 2, Tesla published its delivery numbers for the second quarter of 2025 (ended June 30), and they dropped yet again from a year ago. The company will report its financial results for the same period on July 23, which will show investors how its revenue and earnings were impacted by the sluggish EV business.

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If history is any guide, CEO Elon Musk will probably offer an update on Tesla's self-driving and robotics businesses on the day as well, which could determine the direction of its stock price. With that in mind, should investors buy in ahead of July 23? The answer might surprise you.

Image source: Tesla.

Sinking EV sales have become a trend

In 2023, Musk told investors that Tesla could grow its EV production by 50% per year for the foreseeable future. But in 2024, the company's deliveries shrank by 1% (year over year) to 1.79 million units, marking the first annual decline in sales since the launch of the Model S in 2011. Tesla can't increase production -- especially not by 50% annually -- if the cars aren't selling.

The declines have accelerated in 2025. Tesla delivered 720,803 cars through the first six months of the year, which was down 13% compared to the same period in 2024. During the first quarter (ended March 31), the decline in deliveries triggered a 9% drop in the company's total revenue, and a whopping 71% collapse in its earnings per share. Its second-quarter results might be similar when they are released on July 23.

It won't be easy for Tesla to turn its EV business around because it's fighting external headwinds like increased competition. For instance, Tesla's EV sales plummeted by 60% in Germany during June, despite EV sales growing by 8.6% overall across the country. The company is ceding market share to other manufacturers like China-based BYD, which saw its sales nearly quadruple in Germany last month.

Tesla is experiencing the same struggles in most of its biggest geographical markets, because it simply can't compete with the prices Chinese manufacturers are charging. BYD sells its entry-level Seagull EV for under $10,000 in its domestic market, and MG Motor sells its ES5 EV for under $14,000. Both of those brands entered Europe at much lower price points than Tesla, leaving Musk and his team with a very difficult decision: participate in a destructive race-to-the-bottom price war, or shift Tesla's focus elsewhere.

Autonomous vehicles could dominate Tesla's future

The main reason Tesla isn't designing a fleet of ultra-low-cost EVs is because Musk believes the future of mobility is autonomous. He is directing the company's resources into the Cybercab robotaxi, which is expected to go into mass production sometime in 2026. It will run on Tesla's FSD software so it won't require any human input to function.

The Cybercab will autonomously haul passengers through a ride-hailing network Tesla plans to create, generating revenue for the company around the clock. Wall Street analyst Dan Ives from Wedbush Securities believes this will add $1 trillion to Tesla's valuation over the next year or so, and he isn't the only bull. Cathie Wood's Ark Investment Management predicts Tesla's autonomous ride-hailing business will generate $756 billion in annual revenue by 2029, catapulting the company to an $8 trillion valuation.

However, Tesla's FSD software isn't approved for unsupervised use anywhere in the U.S. right now. The company is currently testing its ride-hailing service using its passenger EVs, with a version of FSD that requires a human supervisor in the passenger seat at all times. It's up and running in Austin, Texas, and is in the process of expanding into Phoenix and San Francisco.

Unfortunately, that means Tesla is already behind in the robotaxi business. Alphabet's Waymo completes over 250,000 fully autonomous, paid trips every week across four U.S. cities, and it's partnered with Uber Technologies, which operates the world's largest ride-hailing network. In other words, Waymo is already operating at a scale that could take years for Tesla to match, so the EV giant is at a serious disadvantage before the Cybercab even hits the streets.

Musk is likely to provide an updated roadmap for FSD and the Cybercab on July 23, which investors will probably focus on more than the performance of the company's EV business.

Image source: Tesla.

Should you buy Tesla stock before July 23?

Despite the enthusiasm surrounding Tesla's robotaxi business, EV sales still account for 72% of the company's total revenue. Autonomous ride-hailing will take years to scale -- if it's successful at all -- so it won't be generating enough income to offset Tesla's struggling EV business anytime soon.

That brings me to Tesla's valuation. Its stock is trading at an eye-popping price-to-earnings (P/E) ratio of 172.2, making it 5 times more expensive than the Nasdaq-100 index, which trades at a P/E ratio of 32.3. The Nasdaq-100 is home to all of Tesla's big-tech peers, so the EV giant is substantially more expensive than the likes of Nvidia, Microsoft, and Amazon, on average.

Since Tesla's EV sales declined in the second quarter, the company's earnings will probably shrink like they did in the first quarter. That means its P/E ratio is likely to soar even higher after July 23, unless its stock declines sharply. As a result, I don't think Tesla stock is a good buy ahead of the upcoming report, and I don't think it will look very attractive in the aftermath, either.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Microsoft, Nvidia, Tesla, and Uber Technologies. The Motley Fool recommends BYD Company and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.