Tesla Inc. is set to release its second-quarter sales and production data in the coming days. The stock has been struggling to maintain its momentum after a remarkable run earlier this month. Tesla was the first U.S. automaker to forgo monthly sales updates and instead provide quarterly data on deliveries and production shortly after the end of each quarter. General Motors followed suit a couple of years later.
According to analysts polled by FactSet, Tesla is expected to report sales of 445,000 electric vehicles (EVs) in the second quarter. The majority of these sales, approximately 434,000, are projected to be Model 3 sedans and Model Y compact SUVs. RBC Capital Markets analyst Tom Narayan predicts sales of 438,000 vehicles, citing checks, regionally reported data, and app-download data as the basis for his forecast.
Narayan notes that global app downloads for Tesla continue to trend higher, which serves as a good indicator for increasing sales. While sales data in China shows improvement, monthly domestic sales remain inconsistent, making deliveries difficult to predict. However, sales in Europe seem to be following normal quarterly delivery trends, with app download data supporting robust deliveries in June. Narayan believes that demand is responding favorably to price cuts earlier this year and asserts that Tesla is on track to achieve its target of selling 1.8 million vehicles for the year.
Deutsche Bank analyst Emmanuel Rosner also raised his second-quarter delivery expectations, now anticipating 448,000 deliveries, up from 438,000. Rosner is optimistic about Tesla’s momentum in China. In April, Tesla reported first-quarter deliveries slightly below FactSet consensus, causing some analysts to express concerns about potential future price cuts.
Tesla has adjusted its EV prices multiple times this year, mostly downward, in response to increased competition in the EV market. Additionally, the company has made adjustments to ensure more of its vehicles qualify for electric vehicle credits in the Inflation Reduction Act. These credits depend on factors such as final assembly location, battery component and minerals sourcing, and the buyer’s income.
Earlier this month, Tesla’s stock achieved a record-breaking 13-session win streak, surpassing the previous all-time run of 11 consecutive gains set in January 2021. So far this year, the stock has gained 108%, compared to a 14% advance for the S&P 500 index.
In conclusion, Tesla’s upcoming second-quarter sales and production data will be closely watched by investors and analysts. The consensus among Wall Street analysts is that Tesla will report sales of 445,000 EVs, primarily consisting of Model 3 sedans and Model Y compact SUVs. Despite concerns about domestic sales and potential price cuts, analysts remain optimistic about Tesla’s demand and its ability to achieve its sales target for the year.
Original Story at www.morningstar.com – 2023-07-01 17:49:00
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