Tesla’s second-quarter electric vehicle (EV) delivery figure beat analyst estimates but posted the second consecutive annual decline, blamed in part on the closure of a German plant
Tesla shares soared 10% on Tuesday thanks to better car deliveries what is expected in the second quarter, despite registering a second consecutive year-on-year decline. Although he weakening demand and the fierce competition contributed to the slowdown in sales, car production Tesla’s affordable prices and its energy storage segment can drive future growth.
Tesla EV Deliveries in Q2 Fall Less Than Expected
Tesla delivered 443,956 EVs in the second quarter, exceeding the Wall Street average estimate of 439,302. However, the figure represents a drop of 4.8% compared to the same quarter of the previous yearafter a year-on-year decline of 8.5% in the first quarter. Consecutive declines mark longest losing streak in quarterly delivery figures since 2012.
Additionally, the Austin-based electric vehicle manufacturer reported the production of 410,831 cars in the second quarter, a decrease of 14% compared to the same period of the previous year, after a year-on-year drop of 12.5% in the first quarter. Tesla attributed the slowdown to factory closure in Germany due to arson and Shipping disruptions following riots of the Red Sea in the first quarter. However, he did not elaborate on the second quarter slowdown.
However, the delivery figuresbetter than expected, eased concerns that the world’s largest electric vehicle maker could lose its crown to its Chinese rival, BYD, which on Monday posted a record number of car deliveries. The Chinese manufacturer sold 426,000 pure electric vehicles, shortening the distance between both manufacturers. BYD surpassed Tesla in car deliveries and became the largest seller of electric vehicles in the last quarter of 2023.
Challenges of fierce competition in China
China is Tesla’s second largest market, accounting for more than 20% of its sales revenue. However, the increasing competition from rivals localities and China’s economic slowdown have affected Tesla’s growth. According to the Chinese Passenger Car Association (PCA), Tesla shipments from its Shanghai plant fell 24.2% year-on-year in June, which represents the fourth relegation this year. Meanwhile, the Chinese government subsidies are encouraging consumers to opt more for new energy vehicles (NEVs). PCA data indicates that NEV sales will grow 28% year-on-year in June.
Despite Tesla’s price cuts since 2023, its high-end market share has eroded as consumers shift to more affordable EVs and hybrid vehicles manufactured by its rivals, particularly BYD. Additionally, Tesla’s lack of variety has made it less competitive than their Chinese counterparts. BYD continually launches new models to meet the local household demand and updates its technology to Reduce costs. BYD’s pure EV sales increased 13% year-on-year in the second quarter. Other competitors, such as Geely, also saw their sales increase by 41% year-on-year in the first half of 2024.
Tesla remains the most valuable EV manufacturer in the world
Tesla is still the largest electric vehicle manufacturer in the world, with a market capitalization of 734.25 billion dollars (683.54 billion euros) at the close of the market on Tuesday. Although Tesla shares are down 7.5% this year, they are up 65% since the first quarter results report. Los investors are optimistic on Tesla’s potential in launching affordable electric vehicles, as its CEO, Elon Musk, announced planes to speed up production en masse in the first half of 2025, instead of the second half.
In April, Tesla announced its plan to cut its workforce world by more than 10% amid slowing growth and intensifying price war in the electric vehicle sector.
He Business growth Tesla’s energy storage pipeline has accelerated: segment revenue rose 7% in the first quarter, up reach the record number of 1,640 million dollars (1,530 million euros), and the energy displays increased up to the record number of 4.1 GWh. Musk expects continued growth in this division.
Besides, the training capacity in Tesla’s AI nearly doubled sequentially, reaching an all-time high. At the annual shareholders meeting, Musk expressed confidence that the humanoid robots Optimus company could raise Tesla’s market valuation to 25 billion dollars (23.27 billion euros). He also predicted that weekly production of cybertrucks could reach 1,300 units.
