Nandini Roy Choudhury, writer
Brief news
Tesla reported a 5% decrease in vehicle deliveries in Q2, but this was offset by strategic price reductions and incentives. The company delivered 443,956 vehicles in Q3, a 14.8% increase from Q2. Tesla’s strategies, including discounts, incentives, low-interest loans, and affordable leasing plans, have impacted its profit margins. Despite a 6% rally, Tesla shares have experienced a 16% decline in 2024. Wells Fargo analyst Colin Langan predicts a decrease in delivery growth due to reduced demand and price cuts, suggesting selling Tesla shares. Investors will focus on Tesla’s upcoming Q2 earnings report and a marketing event in August to unveil its design for a specialized robotaxi, or “CyberCab.”
Illustrated news
In the second quarter, Tesla reported a 5% decrease in vehicle deliveries compared to the previous year. This decline was mitigated by the company’s strategic price reductions and incentives, which successfully boosted customer demand.
After experiencing a decline of 15.5% in value this year, the shares of the world’s most valuable automaker saw a promising increase of 4.5% during premarket trading.
In the three months ending on June 30, the EV maker delivered a total of 443,956 vehicles. This figure represents a 4.8% decrease compared to the same period last year, but a 14.8% increase from the previous quarter.
According to a survey of 12 analysts conducted by LSEG, Wall Street had anticipated Tesla to deliver 438,019 vehicles on average.
In the latest report, Tesla reported delivering a total of 422,405 units of the Model 3 and Model Y, along with 21,551 units of other models such as the Model S sedan, Cybertruck, and Model X premium SUV. During the April-June period, a total of 410,831 vehicles were produced.
Similar to a financial analyst, Tesla has implemented various strategies to stay competitive in the electric vehicle market. These strategies include providing discounts, incentives, low-interest loans, and more affordable leasing plans in the United States, China, and Europe. However, these measures have had an impact on Tesla’s profit margins.
Despite a 6% rally on Monday, Tesla shares have experienced a 16% decline in 2024.
Tesla has implemented various discounts and incentives throughout the year in an effort to stimulate sales.
Currently in China, Tesla is providing a zero-interest loan to encourage customers to purchase a Model 3 or Model Y before July 31. Based on the 2023 annual filing, Tesla’s revenue from China accounted for approximately $21.75 billion, making up 22.5% of its total sales.
Colin Langan, an analyst at Wells Fargo, released a report on Monday, stating that the company predicts a decrease in delivery growth due to reduced demand and a decrease in the effectiveness of price cuts. He suggests considering selling Tesla shares.
According to Wells Fargo, Tesla’s automotive gross margins are expected to decline due to the anticipated price cuts and lower volumes throughout the year.
Investor attention will now turn towards Tesla’s upcoming second-quarter earnings report, scheduled for later this month, as well as a separate marketing event in August where the company will unveil its design for a specialised robotaxi or “CyberCab.”
Source : CNBS News, Reuters
