Tesla’s stock (TSLA) surged over 10% on Tuesday after the electric vehicle manufacturer announced quarterly vehicle deliveries that exceeded Wall Street expectations.
The company reported delivering 443,956 vehicles in the second quarter, surpassing the analyst consensus estimate of 439,302, according to Bloomberg data. “In the second quarter, we produced approximately 411,000 vehicles and delivered approximately 444,000 vehicles,” the company stated. Breaking it down, Tesla delivered 422,405 Model 3/Y vehicles and 21,551 other models.
This total for the second quarter is an increase from the 386,810 vehicles delivered globally in the first quarter but falls short of the approximately 466,140 vehicles delivered in the same period last year. Despite the year-over-year decline, some analysts suggest the EV industry may be performing better than anticipated.
Citi analysts noted, “We continue to see scope for improving sentiment in Tesla shares as well as broader EV sentiment compared with the negative sentiment we have seen over the past ~6 months.” They added that the focus will now shift to Tesla’s Q2 auto gross margins, which will provide insights into the price vs. cost equation, with Tesla’s earnings report due on July 23, along with any updates on future product launches.
Tesla has been facing significant competition from Chinese EV manufacturers in a challenging market. Earlier this year, Tesla initiated a plan to cut more than 10% of its global workforce to reduce costs, a move some analysts viewed as indicative of difficult times ahead.
At a recent shareholder meeting, CEO Elon Musk acknowledged that near-term demand and sales would face challenges as the industry transitions. “It’s tough sledding out there,” Musk commented, noting that competitors are also scaling back their EV investments and production.
Wells Fargo analysts highlighted that Tesla’s gross margin might be impacted in the current competitive market. “Flattening EV adoption in the US and EU, with aggressive competition in China, leaves few immediate levers to pull to increase volumes,” wrote Colin Langan and his team. They have an Underweight rating on Tesla stock with a $120 price target.
Although Tesla does not break out sales of the Cybertruck, investors have gleaned hints about these deliveries from recall notices. Last month, Tesla announced its fourth Cybertruck recall since the vehicle’s release late last year, affecting 11,688 trucks.
Tesla shares also gained over 6% on Monday as Chinese counterparts Li Auto (LI), Nio (NIO), and XPeng (XPEV) reported better-than-expected deliveries. Tesla shares have risen more than 55% since their 52-week low on April 22 but are down nearly 7% year to date.
