What Happened?
Shares of electric vehicle pioneer Tesla (NASDAQ: TSLA) jumped 4.4% in the afternoon session after the company reported its second-quarter production and delivery numbers, which, despite a year-over-year decline, were not as low as some investors had feared.
Tesla announced it delivered 384,122 vehicles in the second quarter. While this represents a 13.5% drop from the same period last year, the figure was roughly in line with, and slightly better than, the bleak expectations on Wall Street. Analysts had anticipated deliveries of around 385,000 to 387,000 vehicles.
The market's positive reaction suggests a sense of relief, as some investors were bracing for a larger miss. The company produced over 410,000 vehicles during the quarter, indicating that production capability remains robust despite softening demand and increased competition. The report also highlighted a strong performance in its energy storage division, with 9.6 GWh deployed.
After the initial pop the shares cooled down to $313.39, up 4.2% from previous close.
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What The Market Is Telling Us
Tesla’s shares are extremely volatile and have had 132 moves greater than 2.5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was a day ago when the stock dropped 5.5% as the company faced mounting concerns over its upcoming second-quarter delivery report and the potential impact of political tensions.
Investors hit the brakes on Tesla ahead of its Q2 delivery numbers, with Wall Street analysts growing increasingly pessimistic. Consensus estimates steadily declined, with some analysts forecasting a significant year-over-year drop in vehicle deliveries. Projections ranged from 355,000 to just under 400,000 vehicles, a notable decrease from the more than 440,000 cars delivered in the previous year. This anticipated shortfall was attributed to several factors, including a sales slowdown in Europe and China, where competition grew.
Adding to investor anxiety was a renewed public feud between CEO Elon Musk and President Donald Trump. The dispute raised concerns about the future of key EV tax credits, which were at risk of being eliminated under a new bill, potentially creating a significant headwind for U.S. sales.
Tesla is down 17.4% since the beginning of the year, and at $313.39 per share, it is trading 34.7% below its 52-week high of $479.86 from December 2024. Investors who bought $1,000 worth of Tesla’s shares 5 years ago would now be looking at an investment worth $3,889.
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