Wolfspeed's Q3 2025 Earnings: A Strategic Milestone in the EV Revolution

Wolfspeed, Inc. (WOLF) delivered a critical update during its Q3 2025 earnings call, offering investors a clear roadmap of its ambitions in the rapidly expanding electric vehicle (EV) and semiconductor markets. With revenue guidance of $170–$200 million and non-GAAP gross margin targets between -3% and +7%, the company underscored both challenges and opportunities in its high-stakes race to dominate the next-generation power electronics space.

The call, led by CEO Robert Feurle and CFO Neill Reynolds, revealed a company laser-focused on scaling production at its flagship Mohawk Valley facility while navigating margin pressures. will be critical to watch, as investors weigh these strategic moves against near-term profitability hurdles.

The EV Traction Play: A 92% Revenue Surge and Beyond

Wolfspeed’s Q2 2025 results already demonstrated explosive growth, with EV revenue jumping 92% year-over-year. The company now expects EV revenue to grow another 20–30% in Q3, fueled by partnerships with automakers and its leading position in silicon carbide (SiC) semiconductors. SiC is a critical material for reducing energy loss in EVs, enabling longer ranges and faster charging—a fact that has made Wolfspeed a darling of the EV supply chain.

The Mohawk Valley plant, which began commercial production in early 2024, is central to this expansion. Reynolds highlighted that the facility will contribute $55–$75 million to Q3 revenue, a significant step toward its $500 million annualized run rate target. This plant’s scale and advanced 200mm wafer technology position Wolfspeed to outpace competitors like STMicroelectronics and Infineon, which are still transitioning to smaller 150mm wafers.

Margin Pressures and the Cost-Saving Imperative

Despite the revenue optimism, Wolfspeed’s margin guidance (-3% to +7% non-GAAP gross margin) reflects the brutal economics of scaling semiconductor production. High capital expenditures and the cost of ramping up new facilities are squeezing margins. However, Reynolds emphasized a $200 million cost-saving initiative targeting operational efficiencies, procurement, and manufacturing yields.

The company’s path to positive margins hinges on two factors: achieving 90%+ wafer utilization at Mohawk Valley and reducing defects in its SiC modules. Reynolds noted progress here, with defect rates already dropping 30% in the past year. If these trends continue, Wolfspeed could stabilize margins by late 2026—a timeline investors will scrutinize closely.

The Bigger Picture: Why Wolfspeed Matters

Wolfspeed’s valuation debate is ultimately about its role in the EV revolution. Analysts project the global SiC market to grow from $2.3 billion in 2024 to $20 billion by 2030—a 35% annual growth rate. Wolfspeed, with its early mover advantage and vertically integrated model (controlling SiC from raw material to finished devices), is positioned to capture a disproportionate share.

The company’s balance sheet also provides a cushion: $730 million in cash as of Q2 2025, with no debt. This liquidity gives Wolfspeed the flexibility to weather margin headwinds while investing in capacity.

Conclusion: A Buy for the Long Game

Wolfspeed’s Q3 earnings call reinforces its status as a critical player in the EV ecosystem. While short-term margin pressures are undeniable, the company’s scale-up trajectory at Mohawk Valley and its leadership in SiC innovation justify a bullish stance for investors with a 3–5 year horizon.

The data is compelling:
- EV revenue growth: 92% YoY in Q2 → 20–30% expected in Q3
- Mohawk Valley contribution: $55–75M in Q3 → $500M annual target
- Cost savings: $200M target to offset margin drag

For those willing to look past quarterly noise, Wolfspeed’s earnings call underscores a rare opportunity to invest in a company at the intersection of two megatrends: electrification and semiconductor innovation. The road to profitability is bumpy, but the destination—dominance in a $20 billion market—is worth the ride.