Tesla Stock Is Up on Excellent Delivery Numbers. How They Did It.

Tesla’s second-quarter delivery results beat Wall Street’s expectations—a nice surprise for investors.

Given the mood surrounding electric vehicles these days, investors might wonder how the EV maker did it. though. A combination of moves by the company, plus a boost from sales in China, appear to be responsible.

Tesla said Tuesday morning that it had second-quarter deliveries of 443,956 vehicles, comfortably above the consensus call compiled by the company of about 438,000 cars. Recent Wall Street estimates fell in a range of 420,000 to 425,000 vehicles.

Telsa produced about 411,000 vehicles in the quarter—an additional piece of positive news. Producing fewer cars than were sold means lower inventories, which should relieve some pressure on the company to reduce prices.

A third plus is that Tesla said it deployed 9.4 gigawatts of battery storage in the quarter, its best quarter ever. There just isn’t a lot to complain about with the delivery report.

Tesla stock was up 5.3% at about $221 a share in early trading, while the S&P 500 and Dow Jones Industrial Average were down 0.1%.

Technical stock market analysts told Barron’s recently that Tesla stock has some resistance around $220 to $225 a share. A point to watch now is whether the stock can break through those levels.

Coming into Tuesday trading, Tesla stock had risen for five consecutive days, gaining about 15% over that span. The gains raised the stakes for a delivery disappointment. That didn’t happen, for a few reasons.

For starters, while Tesla deliveries fell about 5% year over year, marking the second consecutive quarterly decline, things were better than expected, though they still aren’t great. EV sales growth decelerated worldwide early in 2024.

Second, Wall Street estimates tend to drop heading into any quarterly release. A couple of weeks back, analysts had projected about 440,000 cars would be delivered. This time, the Street got a little too nervous headed into the quarter, lowering the bar for deliveries and making it easier for Tesla to beat expectations.

Whatever the expectations, Tesla had to deliver the cars. China likely helped. Delivery results from BYD, NIO, Li Auto, and others showed solid sales in June.

Tesla deserves credit, too. The company introduced a new long-range rear-wheel-drive Model Y. That is a lower-priced option that can go farther on a single charge.

Tesla probably delivered about 10,000 more Cybertrucks in the second quarter than it did in the first quarter. (Cybertruck deliveries began in late 2023.) Tesla also offered some promotional interest rates making its EVs more affordable.

Barron’s recently wrote that any number above 420,000 should be good enough to support the stock.

Options markets implied shares would move about 5%, up or down, following the report. So far that looks prescient.

Shares have moved an average of about 3%, up or down, following the past four reports. They dropped almost 5% after Tesla reported weaker-than-expected first-quarter deliveries.

The second-quarter earnings report comes a few weeks after the delivery news. It has even more potential to move the stock. Tesla shares have moved an average of 11%, up or down, following the past four quarterly reports.

As of the close on Monday, Tesla shares have declined 15% this year while the S&P 500 has gained about 15%. Slowing sales growth and falling earnings estimates have weighed on investor sentiment.

Write to Al Root at [email protected]