Tesla stock pops because Elon Musk's EV maker sold more cars than expected
Tesla sells five electric vehicles — the Models S, 3, X, Y, and the Cybertruck.
Tesla sells five electric vehicles — the Models S, 3, X, Y, and the Cybertruck.
Tesla on Tuesday reported stronger than expected deliveries for the second quarter of 2024 after Wall Street lowered its expectations.
Austin, Texas-based Tesla said it sold 422,405 Model 3 compact cars and Model Y SUVs between April and June, and 21,551 other EVs. Although the automaker does not provide a breakout for those deliveries, they include the Model X crossover SUV, Model S sedan, and the Cybertruck, an electric pickup released for delivery by Tesla last November.
All in all, Tesla delivered 443,956 electric vehicles to customers last quarter, an almost 5% decrease compared to 466,000 units delivered during the second quarter of 2023. Wall Street had expected deliveries of about 436,000 units, according to FactSet estimates. Many analysts had adjusted their expectations ahead of Tuesday to between 415,000 and 420,000 units.
The company also made 388,576 units of the Model Y and Model 3, as well as 21,551 units of all other models. That comes out to a total of 410,831 units, well below last year’s 479,700 units made.
Tesla’s latest recall of the Cybertruck revealed that, as of early June, 11,688 units have been sold since it went on sale. That comes out to an average monthly delivery rate of 1,754 Cybertrucks. Earlier this month, CEO Elon Musk said Tesla had recently reached a peak production rate of 1,300 Cybertrucks in a week.
Sales were boosted by a number of incentives offered to customers — including reduced interest rates and occasional price cuts — in addition to the federal $7,500 tax credit offered in the U.S. The Future Fund’s Gary Black on Tuesday noted that Tesla may now extend its low interest financing into the third quarter, rather than relying on price cuts to help sales.
Tuesday’s report marks a strong turn around from the first quarter, which at least one analyst called a “nightmare” after a series of losses for the company. Tesla delivered just 386,610 EVs over the January to March quarter and produced 433,371 units.
In recent months, Tesla has been lowering investors’ expectations, emphasizing that its preparing for its next growth phase and cutting costs. Since April, Tesla has laid off at least 14% of its workforce and several executives have left the company, including the head of its Supercharger division.
“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 August 8th,” Wedbush Securities analyst Dan Ivessaid in a Tuesday note. Ives added that the results “will be music to the ears” of Tesla bulls, like himself.
Tesla stock gained almost 5% after second-quarter deliveries were reported. Shares are down about 11% year-to-date, a drastic improvement from earlier this year when it was one of the worst performers in the S&P 500.
The stock has bounced back largely because of several strong forecasts from Tesla bulls and Tesla’s promises about the potential of self-driving robotaxis and the Optimus humanoid robots, which Musk has said could eventually sell for between $20,000 and $30,000. Stifel Nicolaus on June 26 initiated coverage of Tesla with a $265 price target. By 2029, Tesla bull Cathie Wood’s ARK Invest Management expects the stock to climb more than 1,400% to $2,600 per share, almost entirely based on the robotaxis.
The stock has also benefited from renewed shareholder support for Musk’s $56 billion compensation package, which could give him more than 20% control over Tesla. The company will fight in Delaware state court to get a judge to reverse their earlier decision voiding the deal.
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