- Tesla’s Q2 vehicle deliveries fell by 5%, but smaller-than-expected decline boosted shares by over 10%.
- Stronger-than-expected sales in China and the US helped Tesla deliver 443,956 vehicles, surpassing Wall Street estimates.
- Tesla faces competition from new, affordable models and has shifted focus to self-driving technology amid aggressive cost-cutting.
Tesla reports 5% drop in deliveries, but price-cutting and cost-saving has soared its shares by over 10%
Tesla’s second-quarter vehicle deliveries dropped by 5%, but the decline was smaller than expected. Thanks to strategic price cuts and incentives, Tesla shares soared over 10%, reaching their highest level in nearly six months.
Analysts highlighted stronger-than-expected sales in key markets like China and the United States. Tesla delivered 443,956 vehicles in the second quarter, surpassing Wall Street’s average estimate of 438,019. Most of these deliveries were Model 3 and Model Y vehicles, totalling 422,405 units. Additionally, the manufacturer produced 410,831 vehicles from April to June.
Despite these strong figures, Tesla has been slow to refresh its car lineup. Rivals, especially in China, continue to introduce new, affordable models, intensifying competition. Meanwhile, plans for Tesla’s sub-$25k EV have fallen flat.
In April, Tesla implemented price cuts in the US, China, and Europe.
The company also offered loans with zero or near-zero interest rates in China and the US. In the US, Tesla promoted leasing plans to make its vehicles eligible for $7,500 federal credits.
Despite these efforts, Tesla’s sales in China, including exports, fell 17% year-on-year. In Europe, sales were particularly weak, dropping 36% in May. Meanwhile, other EV makers like Rivian, GM, Hyundai, and Kia reported increased sales during the same period.
This quarter marks the first time Tesla has experienced a year-on-year sales decline for two consecutive quarters. Musk remains optimistic, expecting increased deliveries in 2024. However, Wall Street anticipates a decline due to overall waning sales in the EV market.
In response to these challenges, Tesla has undertaken aggressive cost-cutting measures, including mass layoffs. The company also shifted its strategic focus away from a long-awaited affordable model to self-driving cars. Despite scepticism about Tesla’s ability to perfect this technology soon, Musk remains confident in its potential to boost the company’s market value. As a brand, Tesla seems more at home when promoting impressive new technologies, rather than competing with the new affordable models coming to the market.
Currently, Tesla shares are up 7.7% to $226.11, though they have declined about 9% so far this year. However, the rise could signal that the EV icon is coming through the other side of its recent rocky spell. We hope to see the ‘T’ badge rising again, and to see the self-driving gamble pay off.
