Tesla Inc reported a record 480,126 vehicle deliveries in the second quarter, up 25% year-over-year and 34% from the first quarter. This impressive figure surpassed the Street estimate of 406,000. However, despite this achievement, Tesla’s stock fell, leaving many to wonder why.
Reasons Behind the Sell-Off
According to Gene Munster, a renowned investor and managing partner at Deepwater Asset Management, there are three key reasons behind the sell-off:
- Buying on the Rumor: Third-party data suggested that Tesla’s deliveries were up 20%, causing the stock to rise 13% over the past five trading days. This pre-emptive buying may have led to a subsequent sell-off.
- High Gas Prices Boosting Demand: The average US gas price per gallon was $4.21 in the second quarter, up 33% year-over-year. This increase may have driven consumers to opt for electric vehicles like Tesla, contributing to the company’s strong delivery numbers.
- End of the Department of Government Efficiency Headwind: The official end of the government effort could be a one-time positive catalyst for Tesla, which may have been factored into the company’s valuation.
A Monster Delivery Number
Munster described the delivery number as “monster” and believes that the sell-off is not a cause for concern. He tweeted, “The EV winter that started in March of 2024 is ending. Even backing out those one-time benefits, it still was a monster delivery number.” On a like-for-like basis, Tesla’s growth rate would have been closer to 27%, the highest quarterly delivery growth rate on a year-over-year basis since September 2023.
What’s Next for Tesla
The strong quarterly figure is a positive sign for Tesla, with two favorable quarters in a row. Despite the Street’s estimate of an 8% year-over-year decline in deliveries for the third quarter, Munster remains optimistic. He highlights that deliveries still matter, as more vehicles on the road mean more data, more FSD usage, and more potential customers for Tesla’s future products, such as Robotaxi and Optimus.
Price Action
Tesla’s stock is down 7.9% to $391.55, with a 52-week trading range of $288.77 to $498.82. Year-to-date, the stock is down 10.7%. As investors and analysts focus on Tesla’s future products and technologies, the company’s delivery numbers will continue to play a crucial role in its valuation and growth.