Tesla’s Earnings Call Was Dire

Happy Thursday! It’s July 24, 2025, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. This is where you’ll find the most important stories that are shaping the way Americans drive and get around.

In this morning’s edition, we’re looking at Tesla’s ever-worsening earnings calls, as well as Hyundai’s tariff hit. We’ll also look at the new cost of metals in the U.S., and an incoming trade deal with the EU.

Tesla had its big earnings call Wednesday, in which the company admitted its sales had fallen off a cliff and it wouldn’t make the money it predicted it would for 2025. All this was expected. What’s more concerning, though, is that the analysts and investors who ask questions on these calls are increasingly unmoored from reality. From Reuters:

Musk said U.S. government cuts in support for electric vehicle makers could lead to a “few rough quarters” for the company before a wave of revenue from self-driving software and services begins late next year.

Tesla posted the worst quarterly sales decline in more than a decade and profit that missed Wall Street targets, but its profit margin on making cars was better than many feared.

…

Most questions were about Tesla’s future and Musk’s promises of a large-scale robotaxi service and humanoid robots.

That’s been a trend on recent Tesla earnings calls, where questions rarely delve into Tesla’s fundamental automotive business, the company’s performance that quarter or consequential current events involving Musk.

The assumption that earnings will be shored up by self-driving vehicle profits by next year when the $3 trillion-endowed HSBC bank predicted it could take up to eight years for self-driving operators to break even should give any investor pause over that plan of attack. Especially after their fearless leader has promising self-driving cars are coming just next year for over a decade now. How often can the market fall for that? You’d also expect questions about Musk’s political activities, which have clearly and directly affected Tesla’s sales and standing as a company on a global scale.

South Korea doesn’t yet have a trade deal with the United States, meaning the trade war is in full swing against our allies on the Korean peninsula. This is a good way to do foreign policy. Anyway, our tariffs have hit Hyundai hard, and the worst is yet to come. From Reuters:

Hyundai Motor posted a decline in second-quarter operating profit on Thursday as U.S. tariffs on vehicles and parts started to weigh on its bottom line and warned of a bigger impact in the current quarter.

…

The South Korean automaker said it was sticking to its annual profit target for now, but it will update the plan after the August 1 deadline for reciprocal tariffs to take effect.

It’s a bit surprising to see that Hyundai is sticking to its 2025 profit targets, since many other automakers have entirely abandoned their predictions for the year. Does Hyundai know something the others don’t, or is this just raw optimism?

When President Donald Trump enacted tariffs on steel and aluminum, he did so in hopes that making American materials cheaper than the competition would force companies to switch suppliers. Instead, American steel suppliers have simply raised their prices to match the tariffs. From Automotive News:

Domestic producers of steel and aluminum have raised their prices since President Donald Trump’s metal tariffs went into effect earlier this year, leading to higher costs for automakers and suppliers also grappling with tariffs on vehicles and parts.

Steel Dynamics on July 21 said it sold steel in the second quarter for an average price of $1,134 per ton, 14 percent higher than in the first quarter. That same day, Cleveland-Cliffs said the average price of its steel stood at $1,015 per ton, up 3.4 percent from the previous quarter.

Those increases track with the rest of the steel market. Generally, prices have risen 10 to 15 percent since the Trump administration announced tariffs this year, said Gerrit Reepmeyer, a partner in the automotive and industrial practice at AlixPartners. Even stronger dynamics are at play in the aluminum market, where prices have risen 30 to 40 percent since the new tariffs were announced, he said.

Who could have seen this coming? Besides every person, I mean. Now it’s just more expensive to make cars outside of the U.S. for our market, more expensive to make them here, and all this for a market that increasingly cannot afford new cars. How long until OEMs start ditching their U.S. operations?

Europe doesn’t yet have a tariff deal with the United States, much like South Korea, because antagonizing your allies and trading partners is a good way to do business and maintain the soft power on which your global hegemony is built. A deal is in the works, where European goods would cost 15% more, but no one’s inked a signature yet. From Automotive News:

The European Union and the U.S. are progressing toward an agreement that would set a 15 percent tariff for most imports, according to diplomats briefed on the negotiations.

Member states could be ready to accept duties at that level and EU officials are pushing to have them cover sectors including cars, the diplomats said.

Steel and aluminum imports above a certain quota would face a higher tariff of 50 percent, one of the diplomats added.

It sounds like cars are still very much up in the air, if they’re not definitively included in the 15% rate. It may be some time yet before a full deal is reached, which is dangerous for the EU as the August 1 deadline looms. 

This cover of The Clash comes from the documentary “I’m Leaving Now,” about a Mexican immigrant in Brooklyn. I should give it a watch.