Tesla has reported a smaller-than-expected 5% drop in vehicle deliveries for the second quarter. The company delivered 443,956 vehicles, which is 4.8% lower than the same period last year but up 14.8% from the previous quarter. The higher-than-expected delivery numbers have reassured analysts and investors about the demand for electric vehicles. CFRA Research analyst Garrett Nelson stated that the data 'greatly assuages concerns regarding softening EV demand.' Tesla's stock rallied more than 10% following the news. Some analysts and investors see this rebound as a positive sign for Tesla, especially with the upcoming robotaxi reveal on August 8. However, there are concerns that the company is relying too heavily on price cuts and incentives. Tesla's sales in China fell 17% in the second quarter, while sales in Europe were down 36% in May alone. Despite these challenges, CEO Elon Musk expects Tesla to increase deliveries in 2024 compared to the previous year. Tesla shares were up nearly 9% at $228.56 on Tuesday afternoon.
The achievement of producing 6 million vehicles is a significant milestone for Tesla. CEO Elon Musk took to Twitter to congratulate the team for their hard work and dedication. This accomplishment reflects Tesla's success in scaling up its production capabilities and meeting the growing demand for electric vehicles. The milestone also highlights Tesla's position as a leader in the electric vehicle industry.
The production milestone could have a positive impact on Tesla's first-quarter deliveries. Analysts have revised their estimates upwards, anticipating that the strong production numbers will translate into higher delivery numbers. However, despite the milestone, first-quarter deliveries are still expected to be below the 422,875 units delivered in the same period last year. This is likely due to the ongoing challenges Tesla is facing in battery production and the design flaws in the Cybertruck.
Tesla is set to report its first-quarter deliveries early next week. Investors and analysts will be closely watching the numbers to assess the company's performance and gauge the impact of the production milestone on its delivery figures. The first-quarter delivery numbers will provide valuable insights into Tesla's ability to meet its production targets and navigate the challenges it is currently facing. Despite the challenges, Tesla's strong financial position and innovative approach to manufacturing and design position the company well for future growth and success.
Tesla could see its stock trade higher on a sum of the parts analysis after its robotaxi day on August 8, 2024. Wedbush analyst Dan Ives has an Outperform rating and recently raised the price target to $300. Ives believes Tesla's march towards 2 million units annual trajectory should be reached over the coming quarters. The analyst sees Tesla's robotaxi day as a key catalyst for the company and believes it will be a key historical moment for the Tesla story. Ives stated that Tesla's FSD segment could be worth $1 trillion in the future. Tesla shares are up 2% to $250.75 on Friday.