Shares of U.S. electric vehicle maker Tesla surged over 10%, driven by improved investor sentiment following second-quarter vehicle delivery results that exceeded market expectations. However, deliveries declined by more than 5% compared to the same period last year, marking a second consecutive quarter of decline.
On the 2nd (local time) in the New York Stock Exchange, Tesla's stock closed at $231.26 per share, up 10.20% from the previous session. This is the highest level in the past six months. Following a rise of over 6% the previous day, the increase expanded to over 10% on this day, pushing Tesla's market capitalization to $737.5 billion based on the closing price. The year-to-date stock price decline narrowed from around 44% to about 7% on this day.
This stock price rally is attributed to Tesla's second-quarter vehicle delivery results released that day, which surpassed market expectations. Tesla's Q2 deliveries totaled 443,956 units, down 4.8% year-over-year but nearly 15% higher than the previous quarter's 386,810 units. This also significantly exceeded Wall Street's forecast of 439,000 units compiled by FactSet. Based on first-half sales volume, Tesla surpassed 910,000 units, far ahead of China's BYD (726,153 units), which had been threatening the top spot.
In particular, the market views that Tesla's Q2 deliveries exceeded production (410,831 units) by more than 33,000 units, likely reducing dealership inventory. Additionally, the energy storage segment recorded its best quarterly performance ever, suggesting potential for expanding market share.
Dan Ives, Chief Economist at Wedbush Securities, described the results in an investor memo as a "turnaround" compared to the worst first quarter, stating, "Simply put, Tesla's worst is behind it. After a turbulent six months, Tesla's story has been revitalized." He added that these Q2 results were surprisingly strong even for bulls. Ben Kallo, Senior Analyst at investment firm Baird, said, "We are encouraged by Tesla's strong delivery volume," calling it a positive factor for electric vehicle investment sentiment. Morgan Stanley maintained its overweight rating on Tesla, setting a price target of $310 per share.
However, concerns have been raised on Wall Street about Tesla's delivery volume declining for two consecutive quarters despite measures such as price cuts and low-interest loan incentives. Tesla has faced challenges compared to other companies due to a relatively aging model lineup, high average prices, and competition from emerging electric vehicle makers including Chinese brands.
In response, Tesla cut prices by $2,000 on three models in the U.S. market in April and offered low-interest loan incentives on some models in May and June. Additionally, in Q2, the price of the full self-driving system was reduced from the previous $12,000 to $8,000. Concerns also stem from continued sluggishness in key overseas markets, with sales in China dropping 24% year-over-year in June.
Jessica Caldwell, Head of Insights at Edmunds.com, pointed out, "Tesla's unplanned price cuts are already anticipated by consumers, so they no longer have the same effect as before," adding, "The model lineup is not significantly different from a few years ago." Colin Langan, an analyst at Wells Fargo, recommended selling Tesla stock in an investor memo on the 1st, citing that price cuts and other factors would weaken profitability.
Investor attention is now focused on Tesla's upcoming Q2 earnings announcement scheduled for the 23rd and the August event. At the August event, Tesla is expected to make announcements related to its dedicated robotaxi.
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