Tesla Exceeds Delivery Expectations in Q2 2024
Tesla, the electric vehicle (EV) giant, has announced that its second-quarter deliveries in 2024 were higher than expected, following revisions to Wall Street projections. From April to June, Tesla reported the sale of 422,405 Model 3 compact cars, 422,405 Model Y SUVs, and 21,551 other EVs. While the breakdown of deliveries for the Model S sedan, Model X crossover SUV, and Cybertruck was not disclosed, it is worth noting that Tesla sold 11,688 Cybertrucks in June alone.
Although Tesla delivered 443,956 electric cars to consumers in the most recent quarter, representing a 5% decrease compared to the same period in 2023, it still surpassed the estimated delivery of around 436,000 units. This positive outcome surprised analysts who had revised their projections downward prior to the announcement. In terms of production, Tesla manufactured a total of 410,831 units, including 388,576 units of Model Y and Model 3 and 21,551 units of other models. This production figure is significantly lower than the 479,700 units produced the previous year.
Sales were buoyed by various incentives offered to consumers, such as intermittent price reductions, lower borrowing rates, and the federal $7,500 tax credit available in the United States. These incentives may have contributed to the increase in sales and helped Tesla achieve better-than-expected delivery figures. Gary Black of The Future Fund suggested that Tesla may consider extending its low-interest financing into the third quarter to further boost sales rather than relying solely on price reductions.
This positive news comes as a relief following a challenging period for Tesla. The organization faced losses and had to prioritize cost-cutting measures. However, Tesla’s recent actions aimed at reducing investor expectations and cutting costs seem to be paying off. The company has terminated a significant portion of its workforce since April and experienced top-level personnel departures, including the director of its Supercharger division.
Analysts like Dan Ives of Wedbush Securities believe that Tesla has overcome its most challenging period and that the demand for EVs will continue to grow. Ives anticipates a positive outcome for Tesla, especially leading up to the historic Robotaxi Day on August 8th. The release of this optimistic outlook by Ives and others has resulted in a surge in Tesla’s stock by over 5% following the publication of the second-quarter delivery data. Despite being among the worst performers in the S&P 500 earlier this year, Tesla’s stock has rebounded significantly with an approximately 11% year-to-date decline.
Tesla’s bullish forecasts, including its claims about self-driving robots and the potential of Optimus humanoid robots, have contributed to the stock’s recovery. Stifel Nicolaus initiated coverage of Tesla with a $265 price objective, while Cathie Wood of ARK Invest Management predicts that the stock could increase by over 1,400% to $2,600 per share by 2029, mainly driven by the growth of robotaxis.
Furthermore, shareholder support for Elon Musk’s $56 billion compensation package has also boosted Tesla’s stock. Musk may potentially own over 20% of Tesla if the compensation package is granted. Despite a legal challenge to nullify the agreement, Tesla remains confident in its case and will file a lawsuit in Delaware’s state court.
Overall, Tesla’s Q2 2024 delivery results have surpassed expectations and indicate a positive trajectory for the company. With strong sales, strategic cost-cutting measures, and promising future innovations, Tesla continues to solidify its position as a leader in the EV industry.
