Tesla's Q2 Deliveries Exceed Expectations, Stock Surges Over 10%

Tesla's Q2 Deliveries Exceed Expectations, Stock Surges Over 10%Tesla on Tuesday, July 3rd, reported its second-quarter 2024 vehicle production and delivery figures, both exceeding analyst expectations, driving its stock price up over 10%.Here are the key figures:

Tesla's Q2 Deliveries Exceed Expectations, Stock Surges Over 10%

Tesla on Tuesday, July 3rd, reported its second-quarter 2024 vehicle production and delivery figures, both exceeding analyst expectations, driving its stock price up over 10%.

Here are the key figures:

• Tesla's total vehicle deliveries in Q2 2024: 443,956

• Tesla's total vehicle production in Q2 2024: 410,831

Analysts had projected Tesla to deliver 439,000 vehicles in the second quarter, according to estimates compiled by FactSet StreetAccount. While deliveries came in above expectations, they were down 4.8% year-over-year, falling from 466,140 units to 443,956. However, deliveries increased by 14.8% from the first quarter. Deliveries are the closest publicly available data to Tesla's sales results.

Tesla categorizes its deliveries into two groups: Model 3 and Model Y, and all other vehicles. However, it doesn't provide specific figures for individual models or regions. Tesla's current product lineup includes the popular Model Y crossover, the Model 3 sedan, the newly launched Cybertruck electric pickup, as well as the Model X SUV and the flagship Model S sedan.

It is worth noting that Tesla faced sales difficulties earlier this year. In the first quarter, its deliveries slumped 8.5% year-over-year to 386,810 units, marking the first annual decline since 2020. A few weeks later, the company reported a 13% decline in annual revenue for the first quarter due to lower average selling prices.

The decline in sales was attributed in part to the temporary closure of Tesla's factory in Germany after an arson attack and delivery delays due to the conflict in the Red Sea. Additionally, the sales drop was linked to the aging of Tesla models, increased competition in the Chinese market, and a recent survey indicating a decline in brand image due to CEO Elon Musk's series of "cringeworthy" actions and political statements.

To stimulate sales, Tesla has introduced a series of discounts and other incentives this year. In the Chinese market, Tesla is currently offering 0% interest loans to encourage consumers to purchase Model 3 or Model Y vehicles before July 31st. According to its 2023 annual report, Tesla's revenue in China was approximately $21.75 billion, representing 22.5% of its total sales.

Colin Langan, an analyst at Wells Fargo, stated in a report released on Monday that Tesla's delivery growth is slowing down due to declining demand and waning price-cut effects. He recommends selling Tesla stock. Wells Fargo expects Tesla's automotive gross margin to decline as further price cuts and lower sales are likely within the year.

Investors' focus will now shift to Tesla's second-quarter earnings report, scheduled to be released later this month, and to a launch event planned for August, where the company will showcase its vehicle designed specifically for ride-hailing services (CyberCab).

Tesla's stock surged over 10% on Tuesday, closing at $231.26 per share. However, the stock is still down roughly 7% year-to-date in 2024.