Tesla the stock is up 109% this year. In the coming days, one number will be even more important to investors: How many vehicles did the company deliver in the most recent quarter?
The world’s largest electric vehicle maker has slashed prices across its entire product line to protect its market position against competitors trying to lure customers with newer models. It’s likely that by the end of this week, Tesla will show how well its strategy is working.
Analysts expect the Elon Musk-led manufacturer to report sales of about 448,350 vehicles over the past three months, up 6% from the first quarter of the year. While Tesla will retain the top spot in global battery-vehicle deliveries, the company will need to accelerate a bit to sell off the 1.8 million to 2 million vehicles it plans to produce this year.
Tesla manufactured and delivered more than 1.3 million cars worldwide last year and remains the dominant EV maker in the US. But in China – its number 2 market – the company has fallen behind BYD Co., which has a much newer lineup and growing global ambitions. The rise of the Berkshire Hathaway-backed manufacturer caught the attention of Musk, who tweeted last month about a Bloomberg TV clip showing him laughing at BYD cars in 2011.
“That was years ago,” Musk wrote. “Their cars today are highly competitive.”
Tesla’s price cuts began late last year, when rising inflation and interest rates began weighing on consumers. The company slashed prices first in China, then the US and Europe.
While Tesla has repeatedly adjusted the rates it charges since then, in some cases it has raised prices again, making their vehicles much cheaper than they were at the start of the year. Bestseller Model Y now starts at $47,740, down from $65,990 in early January.
Tesla is the main beneficiary of the Inflation Reduction Act, with each version of the high-volume vehicles – sample 3 sedan and Model Y SUV – currently eligible for the full $7,500 federal tax credit. Even after that perk began applying to all Model 3 iterations earlier this month, the company offered three months of free fast charging in the United States to help clear up inventory of cars.
That incentive shows Tesla still has a lot of work to do at the end of the quarter to move cars out of its shipments. The Austin-based company has produced more cars than it has delivered since opening new factories outside Berlin and Texas early last year.
UBS analyst Patrick Hummel wrote in a report Thursday that output may again outstrip deliveries in the second quarter.
Some analysts expect more price drops.
Deutsche Bank’s Emmanuel Rosner wrote in a June 26 report: “We still see the risk of further price declines for the rest of the year and into 2024. He expects the company to deliver 1.78 million vehicles. in this year.
Concerns about Tesla’s deliveries not keeping up with production pace in recent weeks have given way to optimism about the company making money from the dominant US charging network. From Ford Motor Co. becoming the first of five automakers to adopt the company’s plugs and ports in exchange for access to Supercharger stations, Tesla’s stock jumped 40%.
That prompted at least four analysts to downgrade the stock.
Barclays analyst Dan Levy wrote on June 21, “The best TSLA short-term fundamentals remain unchanged.
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