Tesla Q2 2025 Earnings Preview: Why One Analyst Expects 46¢ EPS and a Major Margin Rebound

Tesla’s Q2 2025 earnings report drops tonight, and Rebellionaire's Matt Smith has already published his estimate: 46 cents in non-GAAP earnings per share (EPS)—notably higher than Wall Street’s 41¢ consensus. It’s based on a deep dive into Tesla’s production mix, cost structure, and margin performance—especially surrounding the updated Model Y.

Here’s a breakdown of what’s driving Matt’s projection—and why it matters for investors paying attention to Tesla’s long-term fundamentals.

The Model Y Refresh Starts Paying Off

During Q1, Tesla wrapped up a major transition—upgrading production lines at all four factories to produce the new Model Y. That shift temporarily drove up costs and suppressed margins as Tesla cleared out discounted inventory of the older version.

But Q2 is when things normalize.

Matt believes Tesla delivered a much larger share of the new Model Y in Q2 compared to Q1. That shift drives two important improvements:

• Higher average selling prices (ASPs) with fewer discounts

• Improved factory efficiency with production lines back online and operating at higher utilization

ASPs Up, Costs Down

Matt’s assumptions paint a clearer picture of margin recovery:

• Old Model Y ASP (Q1): $34,500

• New Model Y ASP (Q2): $47,500

• COGS decrease for new Model Y: $5,000

This cost improvement is tied to multiple factors—more streamlined configurations, reduced giveaways on features like premium paint or interior upgrades, and better utilization at factories like Giga Texas and Fremont.

What Is “Core Manufacturing Margin”—And Why It’s Rising

To assess Tesla’s true production profitability, Matt strips out full self-driving (FSD) revenue and regulatory credits (ZEV) from his margin calculations. What’s left is what he calls “core manufacturing margin”—a clearer view of what’s happening at the plant level.

Here’s what he sees:

• Q1 2025 Core Manufacturing Margin: 8.1%

• Q2 2025 Core Manufacturing Margin: 15%

That’s a major jump—driven by higher-margin Model Y units replacing low- or zero-margin older ones.

Even more striking: U.S.-made Model Ys are estimated to carry a 24% gross margin, before factoring in any FSD revenue.

Full Forecast: From FSD to Bitcoin

Matt also includes assumptions for:

• A slightly lower FSD take rate globally (7%)

• A modest Bitcoin-related gain (~$280M) due to crypto price movement

• A significant bump in R&D spending (+$150M) related to FSD, Optimus, and AI hiring

• Steady energy margins and continued pressure in used vehicle pricing

When it’s all said and done, he arrives at:

• GAAP EPS: 32 cents

• Non-GAAP EPS: 46 cents

Why It Matters Ahead of Tonight’s Report

Matt’s transparency stands out. While many analysts publish a number without context, he walks through every variable—letting others see, question, and build on his assumptions.

His margin estimate surprised even him, but instead of adjusting the numbers to fit expectations, he trusted the logic. That level of openness is rare—and valuable for anyone trying to understand Tesla’s evolving financial picture.

If his model proves accurate, tonight’s earnings could reveal a quietly significant shift: Tesla’s return to higher manufacturing margins, driven by smarter production, better pricing, and the full rollout of its newest vehicles.

Want to stay ahead of the curve? Follow the latest Tesla earnings insights, breakdowns, and bold predictions at Rebellionaire.com.

Because the real edge comes from understanding the why—not just the headline number.