Investors have prepared for Tesla's poor global sales performance in the second quarter, but this global pure electric vehicle sales champion unexpectedly maintained its leading position with delivery volumes higher than institutional expectations.
On the evening of July 2nd Beijing time, Tesla released sales data showing that in the second quarter, Tesla sold a total of 444000 new cars worldwide, a decrease of 4.8% from the same period last year. This is the first time Tesla has seen a year-on-year decline in sales for two consecutive quarters. In the first half of this year, Tesla's global delivery decreased by 6.6% year-on-year to 837700 vehicles.
However, compared to the sales data of 386800 vehicles in the first quarter, Tesla rose 14.8% month on month in the second quarter, stopping the decline. And this delivery data is higher than Wall Street's expected 438000 vehicles, and also ahead of its main competitor BYD. Tesla still ranks first in global pure electric vehicle sales.
Another positive factor is that Tesla's sales in the second quarter were higher than production, which means that Tesla, which adopts a direct sales model, has consumed enough inventory vehicles. Data shows that Tesla produced 410800 vehicles in the second quarter, a decrease of 14% compared to the same period last year.
The better than expected performance boosted Tesla's stock price. As of Tuesday's close, Tesla's stock price rose 10% to $226.11, reaching its highest level in nearly six months. Prior to this trading day, the company's stock price had fallen by approximately 16% so far this year.
It is difficult to explain in detail why Tesla's global sales have rebounded. This former technology pioneer car company is still in the cycle of model aging, while the new model Cybertruck has not yet formed a large-scale delivery due to manufacturing processes and battery problems.
Frequent price reductions have also led to a continuous reduction in effectiveness. In early July, Tesla once again updated its preferential policies in the Chinese market. Customers who purchase the Model 3/Y model with standard or long range four-wheel drive by the end of this month will be eligible for a five-year, zero interest installment payment plan.
Tesla CEO Elon Musk did not come up with a new way to sell cars, but rather aggressively reduced costs, including several rounds of large-scale layoffs worldwide. According to Musk, Tesla is currently between two major growth waves, and the next wave of growth will only be triggered when a new generation of models is introduced.
Tesla stated in January that it expects a "significant decrease" in delivery growth this year, and abandoned its target of delivering 20 million cars annually by 2030 in its latest annual impact report released in May, a significant change from its long-term annual growth target of 50%.
China is the regional market where Tesla faces the most competitors. According to data from the China Association of Automobile Manufacturers, Tesla China sold 71000 new cars in June, a year-on-year decrease of 24% and a month on month decrease of 2.2%. On the contrary, car companies such as BYD, NIO, Zero Run, and Geely Krypton have achieved their best results in history.
A former Tesla sales system employee pointed out in an interview with Interface News that benefiting from brand influence and a well-established after-sales system, Tesla China's overall sales can maintain basic stability. However, due to the increase in the number of stores and higher order requirements, it has become more difficult for every Tesla salesperson to sell cars.
As a leader in the global electric vehicle industry, Tesla is also a barometer of global electric vehicle sales trends, and its declining sales performance has led analysts to believe that the global pure electric vehicle market is in a weak state.
However, after Tesla's Q2 report was released, Garrett Nelson, an analyst at the US Financial Research and Analysis Center's CFRA, raised Tesla's 12-month target price to $250, stating, "This greatly alleviates concerns about weak demand for electric vehicles."
Wedbush analyst Dan Ives also gave a "buy" rating, setting the target price at $275 per share. Aives believes that Tesla's worst period has passed. "Before the historic Robotaxi Day on August 8th, the demand story for electric vehicles will begin to return to this disruptive technology giant."
There are also investment institutions who hold completely opposite views. According to a report released by Colin Langan, an analyst at Wells Fargo, the company believes that "decreased demand and reduced revenue from price cuts have led to a decrease in delivery growth.". He suggested selling Tesla stocks. Wells Fargo Bank predicts that Tesla's gross profit margin (excluding environmental taxes) will decrease this year due to the possibility of further price reductions and a decrease in sales.