Tesla Tremors In The Q2 Force Make Us Wonder What’s Next

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Tesla stock was on a roller coaster ride Tuesday. Although it had been trading up slightly over the last few days, it was still rather a surprise to see it soar as it did. Ahead of the delivery announcement, Tesla shares gained more than 6% on Monday, with a closing price of $209. A high water mark of $230 during late Tuesday morning had everyone chatting and speculating over what would come next. The Tesla tremors continued on throughout the afternoon, sparked by better-than-anticipated deliveries, although the year-to-year comparison was still down 4.8% from Q2 2023.

But Tesla improved on a sequential basis from the 386,810 vehicles delivered in the first quarter, and the Tesla fanboys and fangirls and everyone in between were all smiles on Tuesday.

What a difference a better quarter makes. Tuesday’s diminished returns made Q1 2024 a misty memory, when Tesla deliveries sank 8.5% year-over-year.

The 5% Tesla jump in early trading Tuesday emerged after the battery electric vehicle (BEV) leader reported quarterly vehicle deliveries that beat Wall Street expectations. Shares rallied more than 10% on Tuesday, hitting the highest level in nearly 6 months at $231.26.

Tesla produced 410,831 vehicles and delivered 443,956 in Q2, the company said Tuesday. Tesla produced 386,576 Model 3/Y vehicles during the quarter and delivered 422,405. As far as all other models, the company produced and delivered 24,255 and 21,551, respectively. Tesla’s current lineup includes its popular Model Y crossover utility vehicle, Model 3 sedan, and the new Cybertruck pickup, as well as the Model X SUV and flagship Model S sedan.

Reports from Tesla’s Chinese competitors Li Auto, NIO, and XPeng also indicated better-than-expected deliveries. Though, Tesla continues to lead these rivals in global EV sales, despite battling last year with BYD for the top spot. In China, Tesla currently teases new buyers with a zero-interest loan if a Model 3 or Model Y is purchased by July 31.

According to its 2023 annual filing, Tesla generated about $21.75 billion of its overall revenue from China, representing 22.5% of total sales.

Tesla shares have rallied more than 50% since their 52-week low on April 22, yet shareholders are keenly aware that the stock is still down about 10% year to date.

Those numbers beat the analyst consensus estimate of 439,302 deliveries, per Bloomberg data. It’s hard to determine the success rate of Tesla’s newest vehicle, the Cybertruck, as the company didn’t break out those numbers separately. However, recalls offer solid hints, and, since the vehicle’s release late last year, 11,688 Cybertrucks seem to have been recalled. Recalls have addressed issues with the Cybertruck’s windshield wiper and trim.

To achieve Tuesday’s delivery levels, Tesla reduced costs. It made the controversial decision to cut more than 10% of its global staff earlier this year, but then also dropped the price of its favorite BEVs, the Model Y and the Model 3. “It’s tough sledding out there,” Musk said with regard to the EV market, adding that competitors have also been scaling back their investments and production targets for electric vehicles. Sales promotions and price cuts did boost the company’s sales. Although, the moves have surely cut into company margins.

An alleged arson attack at Tesla’s factory in Germany as well as shipping delays following Red Sea conflicts produced less-than-desired sales, Tesla said. Those are not the only barriers facing Tesla’s BEV sales — it hasn’t released a new everyday model for 4 years, since the highly anticipated release of the Model Y. It’s hard to argue that brand erosion, too, has cut into the Tesla allure, with CEO Elon Musk’s mercurial behavior at the center of many controversies.

Part of the collective raised eyebrows today was because, during Tesla’s shareholder meeting last month, CEO Elon Musk confirmed that near-term demand and sales will still struggle. Tesla warned investors then that it expected “notably lower” delivery growth for the year. We also learned on that day — another day full of Tesla tremors — that the company’s #1 focus would turn to AI and robotics. We understood that a higher level of compute power has been helping Tesla FSD to drive much better, but to throw off the successful BEV division in lieu of a set of unknowns was unsettling to many who follow Tesla.

Musk said in a social media post that Tuesday’s rally of Tesla stock is “small relative to vehicle autonomy and Optimus,” referring to his company’s self-driving cars and humanoid robots that he has said will significantly boost the EV maker’s market value once they become reality.

Ironically, also on Tuesday, a report out of MIT calculated that, if every vehicle on the road were autonomous, their control system could reduce fuel consumption by 18% and, in turn, carbon dioxide emissions by 25%. As autonomous vehicles begin to roll out all over the world, the authors wondered if these technologies do, in fact, hold the key to reducing our carbon footprint.

Tuesday’s numbers did indicate more than just satisfactory BEV sales. The company also noted that it deployed 9.4 GWh of energy storage products, its highest quarterly deployment to date. Pundits project that energy should keep delivering about 10 GWh per quarter with both lines at the Lathrop factory producing Megapacks. The second Megapack factory could be completed in Q4 of this year, and the China Megapack factory seems ready to ramp quickly.

Final Thoughts about Today’s Tesla Tremors

Mark your calendars.

According to a company statement, Tesla will post its financial results for the second quarter of 2024 after market close on Tuesday, July 23, 2024. At that time, the company will issue a brief advisory containing a link to the Q2 2024 update, which will be available on Tesla’s Investor Relations website. Tesla management will hold a live question and answer webcast that day at 4:30 p.m. Central Time (5:30 p.m. Eastern Time) to discuss the company’s financial and business results and outlook.

Tesla Q2 2024 Financial Results and Q&A Webcast:

  • Tuesday, July 23, 2024
  • 4:30 p.m. Central Time / 5:30 p.m. Eastern Time
  • At https://ir.tesla.com
  • Webcast: https://ir.tesla.com (live and replay)

Approximately two hours after the Q&A session, an archived version of the webcast will be available on the company’s website.

Then there will come August, which is likely to cause more Tesla tremors. On August 8, the company will expand on its plans for full self-driving cars, aka robotaxis.

“In a nutshell, the worst is in the rear-view mirror for Tesla as we believe the EV demand story is starting to return to the disruptive tech stalwart ahead of a historical Robotaxi Day on Aug. 8,” Dan Ives of Wedbush predicted.

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Carolyn Fortuna

Carolyn Fortuna, PhD, is a writer, researcher, and educator with a lifelong dedication to ecojustice. Carolyn has won awards from the Anti-Defamation League, The International Literacy Association, and The Leavey Foundation. Carolyn is a small-time investor in Tesla and an owner of a 2022 Tesla Model Y as well as a 2017 Chevy Bolt. Please follow Carolyn on Substack: https://carolynfortuna.substack.com/.

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