Technology
Tuesday, July 2nd, 2024 2:19 pm EDT
Key Points
- Q2 2024 Performance: Tesla reported 443,956 vehicle deliveries and 410,831 vehicle productions for Q2 2024, surpassing Wall Street’s expectations and causing a rise in Tesla shares.
- Challenges and Responses: Despite production challenges like factory shutdowns and shipping delays, as well as increased competition and brand image issues, Tesla has introduced discounts and incentives to boost sales, particularly in China.
- Future Outlook: Analysts predict declining delivery growth and lower margins due to potential price cuts, shifting investor focus to Tesla’s upcoming second-quarter earnings report and the planned reveal of a new robotaxi design in August.
Tesla reported its second-quarter vehicle production and deliveries numbers for 2024, showcasing a strong performance despite a year-over-year decline. The company delivered 443,956 vehicles and produced 410,831 vehicles in Q2 2024, surpassing Wall Street’s expectations, which had estimated 439,000 deliveries. Although the delivery numbers were down 4.8% from the previous year, they marked a 14.8% increase from the first quarter of 2024. As a result, Tesla shares rose over 6% in premarket trading, despite being down 16% for the year.
Tesla’s deliveries, an approximation of sales, are categorized into two groups: Model 3 and Model Y vehicles, and all other vehicles, including the Model X SUV, Model S sedan, and the new Cybertruck pickups. The first quarter of 2024 saw an 8.5% drop in deliveries to 386,810 vehicles, the first annual decline since 2020. This was followed by a 13% decrease in year-over-year revenue, primarily due to lower average selling prices.
The decline in sales was partly due to temporary factory shutdowns, including one caused by an alleged arson attack at Tesla’s factory in Germany and shipping delays linked to conflicts in the Red Sea. Additionally, Tesla faced challenges from an aging vehicle lineup, increased competition from other electric vehicle (EV) manufacturers, especially in China, and brand erosion attributed to CEO Elon Musk’s controversial public behavior.
To boost sales, Tesla has introduced various discounts and incentives. In China, the company is offering a zero-interest loan for customers purchasing a Model 3 or Model Y by the end of July. China remains a significant market for Tesla, contributing approximately $21.75 billion or 22.5% of its total sales in 2023.
Despite these efforts, analysts like Colin Langan from Wells Fargo are skeptical about Tesla’s future growth. Langan predicts declining delivery growth due to lower demand and reduced returns on price cuts. He suggests selling Tesla shares, anticipating that automotive gross margins, excluding environmental credits, will fall as more price cuts and lower volumes are likely throughout the year.
Investor attention is now turning to Tesla’s second-quarter earnings report, expected later this month, and an upcoming marketing event in August, where Tesla plans to unveil its design for a dedicated robotaxi, dubbed the “CyberCab.”
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/07/02/tesla-tsla-q2-2024-vehicle-delivery-and-production-numbers.html
