Tesla Q2 deliveries meet analysts' estimates as chip shortage weighs
Reuters
Published Jul 02, 2021 08:59AM ET
Updated Jul 02, 2021 02:06PM ET
By Hyunjoo Jin and Akanksha Rana
(Reuters) - Tesla (NASDAQ:TSLA) Inc on Friday posted record vehicle deliveries for the second quarter that were in line with Wall Street estimates as the electric-car maker coped with a shortage of chips and relied on sales of its cheaper models.
Tesla weathered the global supply crisis better than legacy automakers, but CEO Elon Musk has warned of challenges of securing chips and raw materials.
Now eyes are on its second-quarter earnings to see whether recent drops in bitcoin prices would have an adverse effect on Tesla's bottom line, due to Tesla's exposure to the cryptocurrency's volatility.
Tesla delivered 201,250 vehicles in total during the second quarter. Analysts had expected Tesla to deliver 200,258 vehicles, according to Refinitiv data.
"It was a solid quarter to volume wise, but I view it as a modest disappointment," Garrett Nelson, an equity analyst at CFRA Research, said.
Shares of the company inched up 0.3%, after rising as much as 3.3% in early trading on Friday.
"Overall, the bulls are breathing a sigh of relief with these delivery numbers," said Dan Ives, an analyst at Wedbush Securities.
The deliveries of its Model 3 sedans and Model Y crossovers, its two lower priced variants, accounted for 99% of its deliveries, offsetting a drop in deliveries of higher-end Model S and X vehicles.
"Our teams have done an outstanding job navigating through global supply chain and logistics challenges," Tesla said.
Tesla has been raising prices for its vehicles in recent months, which its billionaire boss, Elon Musk, blamed in May on "major supply chain price pressure", especially raw materials.
He also said in early June that "Our biggest challenge is supply chain, especially microcontroller chips. Never seen anything like it."
Brokerage RBC said, "Worst may be over for Tesla" for chip shortage, but added that potential margin impact from broad supply chain tightness could persist through the year.
CHINA, MODEL S PLAID
In China, a major growth market for Tesla, the company is facing large-scale recalls, heightened scrutiny from regulators and the public, as well as rising competition from local EV companies.
"The demand issues were in April around China but clearly rebounded in the month of May and June," Ives said.
Tesla sold 21,936 Model 3 and Model Y cars to Chinese customers in May, rebounding from a sales slump in April, but still well below March numbers. Its China sales for June will be released in the coming days.
Tesla saw the deliveries of its Model S and X vehicles slip to 1,890 during the April to June period, as a new version of its Model S faced delays before its June launch.
A Tesla Model S Plaid electric vehicle with a price tag of $129,990, burst into flames on Tuesday while the owner was driving, just three days after the car was delivered. The owner's lawyer called for the model to be grounded. Tesla did not have an immediate comment when contacted by Reuters.
Get The News You Want
BITCOIN
Sharp (OTC:SHCAY) drops in bitcoin prices also could weigh down on Tesla's second-quarter earnings, analysts say.
On Feb. 8, Tesla disclosed its bitcoin investment of $1.5 billion. Its bitcoin holdings helped generate profits in the first quarter, through the sale of 10% of them.
But the investment is also exposing Tesla stocks to the volatile cryptocurrency prices, which suffered from recent falls.
"Tesla stock price has been pretty closely correlating with the price of bitcoin," Nelson said, adding this hurts investor sentiment despite bitcoin accounting for a small portion of Tesla's overall cash.
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.