Tesla’s Delivery Rebound Fails to Crush Negative Narrative

The biggest energy crisis in history just delivered a much-needed opportunity for Tesla.

Last week, the electric vehicle maker said it had delivered 480,126 cars in the second quarter, a massive increase from just 384,122 deliveries a year ago and blowing out consensus analyst expectations of around just 406,000. On Wall Street, however, Tesla is stuck in reverse: Shares fell more than 7% on the same day as the big beat, marking its worst single-day slide in about a year.

Spinning Its Tires

Even with the big sales resurgence, Tesla likely won’t touch its annual deliveries peak in 2023, when it sold 1.8 million cars. Last year, its deliveries slumped to about 1.6 million; this year, it looks on pace to return to about 1.7 million. The causes of its sales slump are numerous and obvious: the death of the $7,500 EV tax credit in the US, rising competition abroad and the cancellation of its much anticipated low-cost model. Oh, and a lingering Musk-y smell of politically charged bad PR.

External estimates indicated that Tesla’s US sales remained in a slump this quarter, while surging in Europe and China, where the energy crisis has been even more acute. Still, it wasn’t enough to catch a key competitor:

• Cox Automotive said its data showed a 20% year-over-year decline in US deliveries in the second quarter. Meanwhile, new vehicle registration data in Europe showed Tesla sales rose around 57% in the region through the first five months of the year, according to ACEA, and sales in China have been on an eight-month growth streak, according to the China Passenger Car Association.
• Rival Chinese EV-maker BYD also reported its second-quarter deliveries last week, trouncing Tesla with 557,090 vehicles delivered over the same three-month period. Its overseas sales were up more than 94% in June as it speeds into Europe and Latin America.

Thrive to Survive: EV also-ran Rivian reported its deliveries last week, too, claiming 12,194 in the second quarter, above expectations. Take it as a sign that the EV winter may be thawing. Tesla, which saw investors “buy on the rumor, and sell on the news” of its big beat, is hoping the US launch last week of its Model Y L, which features a third row of seats, can help its turnaround. In other words, the way back for Tesla involves the revival of “the way back” seating option.