Tesla delivered 480,126 vehicles in the second quarter, up about 25 percent from a year earlier and the most the company has ever shipped in a June quarter. It also deployed 13.5 gigawatt-hours of energy storage, up about 41 percent. The stock closed Wednesday at $394.46, down about 12 percent year to date, leaving a market capitalization near $1.5 trillion and a multiple of roughly 360 times earnings. Investors paying that premium are not buying delivery counts. They need evidence that volume converts to profit, and that evidence arrives July 22 after the close.
The number that will move the stock is automotive gross margin excluding regulatory credit sales. That metric has expanded for four straight quarters: 12.5 percent in the first quarter of 2025, 15 percent in the second, 15.4 percent in the third, 17.9 percent in the fourth, and 19.2 percent in the first quarter of 2026. Regulatory credits, nearly pure profit but unrelated to the economics of building cars, contributed 3.7 percentage points to automotive gross margin in the first quarter of 2025 and just 1.9 points a year later. The streak is real, but it comes with an asterisk.
Tesla said its first-quarter results included one-time benefits from warranty adjustments and tariffs that lifted both the automotive margin and the 4.2 percent operating margin. The July 22 report has to show the margin held near 19 percent on record volume without that help. If the ex-credit margin stays in the high teens, the bull case simplifies: Tesla just posted its best second quarter of deliveries while preserving the pricing gains and cost work of the past year. If it steps back toward the mid-teens, the record quarter looks bought with discounts, and the profit story supporting a $1.5 trillion valuation gets much harder to tell.
Energy deployed 13.5 gigawatt-hours in the quarter, its second-largest ever behind the 14.2 gigawatt-hours of the fourth quarter of 2025. The segment carried a gross margin near 40 percent in the first quarter, though energy revenue actually fell 12 percent year over year in that period, so deployments alone do not guarantee segment growth. Full Self-Driving subscriptions reached 1.28 million active users in the first quarter, up 51 percent year over year, and unsupervised robotaxi rides launched in Dallas and Houston in April. That subscription base is the high-margin revenue the valuation needs more of, but autonomy remains mostly a 2027-and-beyond story.
The margin line shows whether the business funding those bets is getting more profitable or less as it scales. At 360 times earnings, the market has already priced in a lot of things going right. July 22 will tell it whether the core operation is still one of them.