Key Takeaways:
- 462,890 vehicles delivered in Q3, a ~6% increase YoY.
- Price cuts hit margins before Oct. 23 report.
- Stock dropped 3.7% on news, up 32% in Q3.
- Robotaxi event on Oct. 10th, earnings on Oct. 23rd.
Delivery Miss Expectations
On Oct. 2nd, Tesla released its Q3 2024 Production & Delivery report which showed the company delivered 462,890 vehicles. This fell slightly short of analyst expectations, which ranged from 463,310 to 472,000. However, based on Tesla’s own survey of 30 analysts, who expected 461,978 deliveries, the company exceeded expectations by a small margin. Compared to the same period last year, when Tesla delivered 435,059 vehicles, this represents a ~6% increase.
Competition and Margin Concerns
Tesla faces intense competition, especially in China. Wedbush analysts reported that promotional activities boosted sales, but a slowdown in the U.S. and Europe likely offset this strength. Rivals like BYD and Geely are gaining market share, with BYD selling a record 417,603 vehicles in September. In the U.S., Ford and General Motors reported 23,509 and 32,100 EV sales, respectively.
To compete, Tesla has lowered its model prices and has extended buyers a 5-year loan with 0% interest. Although these efforts have increased sales, they have also reduced profit margins. In Q2 2024, Tesla’s profit margins dropped to 14.6%, down from nearly 30% two years ago. Investors will be watching these margins closely in the upcoming Q3 earnings report on October 23.
Robotaxi Event Expectations
Expectations for Tesla’s Robotaxi event on Oct. 10th are high, with analysts anticipating that Tesla will provide significant details on the Robotaxi, including its cost of operation and production locations. Additionally, they expect Tesla to reveal a lower-cost vehicle, a long-term goal for the company. Analysts see this event as a potential “seminal” moment for Tesla’s future.
Market Update Into September 7th: Inflation Data Incoming