Tesla stock (TSLA) lost 3.5% on Oct. 2 after the electric vehicle maker reported third-quarter deliveries of 462,890, up about 6% from a year earlier. This marks the first year-over-year growth in quarterly deliveries for 2024.
However, the number slightly missed analysts’ forecast deliveries of 463,310, according to FactSet StreetAccount data. Tesla's year-ago period saw deliveries of 435,059 vehicles with production totaling 430,488.
The company also said it produced 469,796 vehicles and deployed 6.9 GWh of energy storage products during Q3.
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Tesla stock is down 0.33% year-to-date, largely underperforming the S&P 500 Index, which is up more than 20%. However, the stock has already recovered from the slump earlier this year, which was caused by weak sales.
Tesla's Q1 deliveries were harsh, with a total of 386,810 units, an 8.5% year-over-year decline, significantly missing even the most pessimistic analyst forecasts. First-quarter production was 433,371 vehicles, down 1.7% compared to the previous year.
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The company cut the U.S. prices of its Model Y, Model X, and Model S vehicles by $2,000 each in April after first-quarter deliveries to address the increasingly challenging global EV market.
Second-quarter deliveries of 443,956 vehicles were better than analysts’ expectations but still represented a 4.8% yearly decline.
Tesla’s energy business thrives
Tesla will release its Q3 financial results after the market closes on Oct. 23. In the previous quarter, the company reported earnings of $0.52 per share, falling short of analysts' expectations of $0.62.
Revenue for the second quarter reached $25.5 billion, slightly exceeding forecasts, but automotive sales dropped 6.5% to $19.9 billion.
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Tesla’s core automotive segment, which makes up around 78% of its revenue as of Q2, is losing market share to other electric vehicle brands. Cox Automotive data reveals that non-Tesla EV sales in the U.S. increased by 33% in the first half of 2024, while Tesla sales fell by 9.6%, InsideEVs reported.
However, the company is thriving in its energy business. In the second quarter, Tesla’s energy generation and storage segment brought in $3 billion in revenue, doubling the $1.5 billion from the same period last year. This segment represents approximately 12% of Tesla's revenue as of Q2.
Investment bank William Blair analyst Jed Dorsheimer initiated coverage of Tesla with an outperform rating in September. He notes that the company is building an energy ecosystem that is "Apple-esque" when integrated with its automotive business and future opportunities in areas like artificial intelligence, robotaxis, and robotics.
"We view Tesla Energy as the most underappreciated component of the Tesla story and expect the narrative will shift toward the energy storage business in light of tempered EV expectations in the near term," said Dorsheimer in a note, thefly.com reported.
Analysts' reactions are mixed
Analysts have responded with mixed outlooks following the Q3 delivery report. Ben Kallo from Baird mentioned that deliveries were lower than the firm anticipated but noted that energy storage deployments were robust at 6.9 GWh, representing the second-largest quarterly figure in Tesla’s history.
Baird also expects the Q3 deliveries to be a “look-through event” with attention quickly shifting to the robotaxi event unveiling on Oct. 10. The firm has an outperform rating on the shares with a price target of $280, according to thefly.com.
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Evercore ISI remains more cautious. The firm’s analyst Chris McNally called the delivery numbers a “slight expectational disappointment” given "recently heightened" buy side forecasts at about 470,000 and the consensus call for 462,000 units.
Evercore ISI expects Tesla’s Q3 EPS to fall between 57 cents and 59 cents, with a gross margin of about 15%. It has an in line rating on Tesla shares.
Barclays also acknowledged the delivery miss, attributing it to weakness in Model S, X and Cybertruck. Barclays keeps an equal weight rating on Tesla with a $220 price target.
Tesla traded at about $249 on Oct. 2.
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