Tesla Inc. : Tesla’s second-quarter record deliveries cheer Wall Street

(BFM Bourse) – The manufacturer, which specializes in electrics, exceeded expectations in the period from April to the end of June, shipping 466,140 cars, where analysts expected only 446,000 units.

Tesla volumes have outperformed the market. The famed electric carmaker has vowed to maintain a blistering pace of growth (almost 50% increase in its deliveries each year) as competition proves increasingly fierce, particularly from Chinese manufacturers.

But for now, Tesla’s race by numbers is keeping its promises. The group announced on Sunday evening its deliveries for the second quarter, shipping a total of 466,140 vehicles from the beginning of April to the end of June, an increase of 83% compared to the same period in 2022. And compared to the first quarter of 2023, reached the increase up to 10%.

Above all, this number is clearly higher than analysts’ expectations, which counted on deliveries of just 444,000 units.

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The “bears” returned to “hibernation”

Thus, Tesla appears to be on track to reach its goal of 1.8 million vehicles delivered, although its CEO, Elon Musk, had warned that this forecast was cautious and that the group could approach two million.

On Wall Street at the beginning of the session, Tesla shares are moving strongly up 6.7%, adding about 48 billion dollars to the valuation of the car group.

Wedbush analyst Dan Ives assessed on Twitterthat this publication had marked “a massive outperformance” compared to expectations, which “sends the ‘bears’ (investors betting on a fall in Tesla, ed.) into ‘hibernation'”.

“The price drop was a smart play for Tesla and delivered significant dividends on the ground, especially for the Chinese market. This quarter was a real trophy for Musk and others,” the analyst continued.

Since the end of 2022, Tesla has actually implemented price reductions on its flagship models (Model 3, Model Y, Model S) in China, the United States and Europe.

Sacrificed margins

However, it remains to be seen at what price this increase in volumes took place. The company will announce its financial results on July 19, at which time the market will be able to dissect the impact on margins of the company’s pricing policy. In the first quarter, the operating margin had fallen from 19.2% in the first three months of 2022 to 11.4%.

Also, the figures released on Sunday evening still show the car group delivering fewer cars than it makes, as production stood at 479,700 vehicles, a difference of just over 13,000 units. However, the difference is reduced compared to the previous quarter (18,000).

In any case, Tesla continues its good run in the stock market, recovering 112% over the year. This progress was recently supported by the announcements of the opening of its system of compressors for electric vehicles at Ford and General Motors last week. The two American manufacturers will thus gain access to Tesla’s network of “supercharger” stations in 2024.

Cited by Fortune, investment bank Piper Sandler estimates that Tesla could add $3 billion in revenue by 2030 and $5.4 billion by 2032 by opening its “superchargers” to non-Tesla cars.

It should also be noted that Chinese rivals of Tesla are well versed on Wall Street. ADR (American deposit receipt, deposit receipts that allow betting on Wall Street on non-American groups) for XPeng, takes 8.5%, and Nio advances with 4.6%. Both EV makers posted solid deliveries in June, up 15% month-on-month for the XPeng to 8,620 units and 74% for the Nio to 10,707 cars.

Julien Marion – ©2023 BFM Bourse

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