Tesla raced higher Monday after reporting record global deliveries, as price cuts and discounts propelled demand well above Wall Street forecasts.
Tesla Deliveries
Tesla deliveries ran to 466,140 in the second quarter, sprinting past Q1's record 422,875 and Q4's 405,278. That easily beat Q2 estimates of around 445,000, according to FactSet.
Model 3 and Y deliveries hit 446,915 in Q2. Model S and X deliveries picked up to 19,225.
Production hit 479,700, exceeding deliveries once again, even with Tesla curbing output below capacity.
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The EV giant had been working to move inventory before the end of the quarter, offering discounts and deals running through the end of June, especially on inventory vehicles
In mid-June, the EV giant began offering customers who ordered a Model 3 between June 14-30 three months of unlimited free supercharging, according to the company's website.
In China, Tesla once again offered insurance subsidies on Model 3 vehicles. Costumers in China who buy and complete delivery of an inventory Model 3 rear-wheel drive vehicle before the end of June will be eligible for an insurance subsidy of about $1,120, according CnEVPost.
Tesla also got all Model 3 vehicle trims eligible for the full $7,500 tax credit under the Inflation Reduction Act (IRA) in early June. Tesla's Model 3 and Model Y vehicles all qualify for the $7,500 tax credit.
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Tesla Stock
TSLA stock rose more than 6% in premarket trade.
Tesla shares were up 114% in 2023 and 159% from their Jan. 6 low, as of June 30.. TSLA is still well off from the all-time high 414.50 it hit in November 2021.
Tesla is well extended past a 207.79 buy point from what's either a cup or a double-bottom base.
Tesla stock 2% to 261.77 in last week's market trade, reversing higher after tumbling 6.1% on Monday.
Analysts continue to worry about price cuts weighing on gross margins, and Tesla's valuation. Four analysts downgraded TSLA stock in the days leading up to the Q2 delivery report, though usually offset by price target hikes.
On April 19, Tesla reported a big first-quarter earnings decline while revenue missed views. Profit margins for the global EV giant also fell below 20% as the company executed an aggressive price-slashing strategy in the first part of 2023. Tesla reported revenue increasing 24% to $23.33 billion with earnings of 85 cents a share, a 20% decline compared with 2022.
The EV company's total gross profit came in at $4.5 billion, with Tesla's profit gross margin at 19.3%, down from 23.8% in the fourth quarter and 29.1% a year earlier.
Auto gross margins excluding regulatory credits and leases skidded to 18.3% from 23.8% in the fourth quarter. That remains below the 20% gross margin "floor" Tesla previously targeted.
Tesla stock ranks third in IBD's automaker industry group. It has a 98 Composite Rating out of 99. Tesla has a 91 Relative Strength Rating and its EPS Rating is 93 out of 99.
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Tesla Delivery Expectations
Analysts predict Tesla deliveries in 2023 to come in around 1.82 million, up from 1.313 million in 2022.
In April, Tesla Chief Executive Elon Musk told analysts Tesla is "comfortable" with its 2023 production target of 1.8 million. However, he downplayed the 2 million production number he used at the end of the fourth quarter.
"These are volatile times," Musk said. "From a production standpoint, if things go well, we've got a shot at 2 million vehicles here. But that is the upside case."
Tesla has not given a 2023 delivery target.
In Q1, Tesla deliveries rose 36% vs. a year earlier to 422,875. That was 4% above the prior record of 405,278 in Q4. However, Wall Street expected around 431,000 Tesla deliveries. Production once again exceeded deliveries, at 440,808.
The Tesla Model Y was the world's bestselling vehicle of any type in Q1, according to data compiled by industry analyst JATO Dynamics for Motor1. The Model Y had 267,200 sales in Q1, according to data from 53 markets and estimates for the rest of the world.
Tesla has just four models, with the bulk of its sales the Model Y crossover SUV. However, the Cybertruck is expected later this year. There's also the specter of a revamped Model 3, but it's unclear what the changes will be.
Please follow Kit Norton on Twitter @KitNorton for more coverage.
