Tesla faces downside risks ahead of second-quarter earnings

According to CNBC, Tesla is set to report second-quarter earnings on Wednesday, and the stock is under pressure after its recently released second-quarter sales and delivery figures beat consensus expectations but failed to spark a rally. The report said the backdrop for Tesla looks challenging because of competitive pressure, valuation expectations and softer enthusiasm for pure-play EVs. It said Rivian's R2 targets the $45,000 to $60,000 mass-market SUV segment, while more than 96% of Tesla's 2025 sales were Model 3 and Model Y. The article also said Tesla's valuation depends heavily on Optimus and full self-driving, while speculation about potential corporate actions involving SpaceX has lost momentum. It added that Tesla's post-earnings moves have been more muted in recent quarters, with the at-the-money straddle expiring July 24 priced at roughly 7% of the stock price, below its long-term average post-earnings swing of about 9%.