Jul 03, 2024

Tesla shares rallied on Tuesday after the company reported a smaller-than-expected 5% drop in vehicle deliveries for the second quarter. The electric vehicle maker has seen its price cuts and incentives boosting demand.

TSLA-–-Daily-ChartTSLA – Daily Chart

TSLA has now rallied from an April low and could have further upside after recent resistance clearances.

Tesla’s higher-than-expected deliveries data “greatly assuages concerns regarding softening EV demand,” CFRA Research analyst Garrett Nelson said. “The stock continues to ride a wave of positive momentum following its annual meeting in mid-June in which shareholders re-approved Musk’s 2018 compensation plan,” he said.

Elon Musk’s company is also set for a reveal of its robotaxi plans in August. However, some analysts said the EV maker is exhausting its “bag of tricks,” analysts at research firm Edmunds said, referring to the price cuts and incentives.

Tesla delivered more than 443,000 vehicles in the three months to June 30, which was 4.8% lower than a year earlier and up 14.8% from the preceding quarter. Wall Street had expected the company to deliver 438,019 vehicles, according to a poll of 12 analysts with LSEG. Tesla delivered 422,405 Model 3 and Model Ys, and 21,551 units of other models, including the Model S sedan, Cybertruck, and Model X premium SUV.

Tesla has seen its share price struggle this year due to slowing sales in China. Investors overwhelmingly voted to approve Musk’s record $56 billion pay package at the annual shareholder meeting. Board chair Robyn Denholm said ahead of the vote that reinstating the pay package was necessary for “retaining Elon’s attention and motivating him”.

Analysts at Bloomberg said the company was now running out of excuses after the latest figures. “It’s tougher to grow when you have increased competition and the current model lineup is a little stale,” said Tom Narayan, global autos analyst at RBC Capital Markets, who has a buy rating on Tesla’s stock.

Tesla announced big staff cuts in April, which affected more than 10% of Tesla’s workers, including its sales staff. Analysts will now be focused on the robotaxi offering with a need to provide some excitement for investors. The company has applied for a patent for an automated cleaning system for its cars.

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