Tesla shares surged over 6%

Tesla’s portion of the U.S. electric car market drops to less than 50% According to a recent report, Elon Musk's company accounted for slightly less than half of all battery-electric vehicles sold in the second quarter. Tesla is scheduled to post its second-quarter financial results on July 23 and is expected to unveil its design for a robotaxi next month.

Tesla shares and deliveries over the years

1. Shares
   Tesla shares surged over 6% on Monday, reaching their highest level since January, driven by growing optimism ahead of the electric vehicle maker's eagerly awaited second-quarter deliveries report scheduled for Tuesday.
   

The stock has rallied more than 70% from its 2024 lows in April and is close to wiping out losses for the year. Tesla shares closed 2023 at $248.48 and, on Wednesday, closed 6.5% higher at $246.39.

Tesla (TSLA) is set to announce its second-quarter global vehicle deliveries on Tuesday, with analysts predicting figures potentially below the current consensus. Amid a slowdown in electric vehicle (EV) demand in 2024 and a dominant focus on AI technologies in the market, some analysts are shifting their attention to Tesla's second-quarter energy storage performance. Despite these factors, TSLA shares showed upward momentum on Monday.

1. Deliveries
   Analysts, as of Monday, predict global second-quarter Tesla deliveries will total 436,000 vehicles, according to FactSet. The consensus view at the end of May called for 448,000 deliveries. It has dropped 3% since then.

The Tuesday delivery report comes after the company in April posted a decline of 8.5% in first-quarter deliveries to 386,810 — the first annual drop since 2020.

The current estimate would be down 6.5% compared to last year's 466,140 deliveries. But it would be a 13% increase compared to Q1.

Tesla hit a record 484,507 deliveries in Q4 2023. The company reported in early April that global first-quarter deliveries totaled 386,810, undercutting even the lowest estimates and marking the lowest quarterly deliveries since 344,000 in Q2 2022.

In the second quarter of 2024, Tesla delivered 443,956 vehicles and produced a total of 410,831 vehicles. Analysts, based on estimates compiled by FactSet StreetAccount, had anticipated Tesla's deliveries, the closest measure to sales disclosed by the automaker, to reach approximately 439,000 vehicles by the end of June 30.

Why did Tesla stock surge?

Anticipation of Strong Delivery Numbers: Investors were optimistic ahead of Tesla's second-quarter delivery report, expecting robust figures despite challenges in the EV market. Tesla's stock surged primarily due to robust delivery numbers, exceeding expectations and demonstrating strong demand for its electric vehicles. Additionally, Tesla's consistent profitability and efficient cost management bolstered investor confidence. The company's technological innovations in autonomous driving and battery technology, along with plans for global market expansion including new factories and partnerships, contributed to its positive momentum.

Elon Musk's influential leadership and positive market sentiment towards electric vehicles and sustainable energy also played crucial roles. These factors collectively drove Tesla's stock price higher, reflecting optimism about its future growth prospects in the competitive automotive and technology sectors. Here are some main factors:

1. Positive Market Sentiment
   Favorable sentiment around Tesla's brand, technological advancements, and future growth potential contributed to increased investor confidence.
2. Broader Market Trends
   The overall market sentiment and investor interest in electric vehicles (EVs) and renewable energy sectors also buoyed Tesla's stock.
3. Energy Storage Focus
   Attention on Tesla's energy storage segment, amidst broader trends in renewable energy and sustainability, added to investor interest.
4. Technical Factors
   Stock movements can also be influenced by technical factors such as trading patterns and institutional investor activity.
5. CEO Elon Musk's Influence
   Elon Musk, as the charismatic CEO and a major shareholder of Tesla, can also impact the company's stock price through his public statements, tweets, and strategic decisions. Musk's vision and leadership often influence investor confidence and market perception of Tesla's future.

Elon musk and his strategy

1. layoffs
   Tesla CEO Elon Musk said the company has to “reorganize and streamline the company for the next phase of growth” every five years after at least 10 percent of its global workforce was trimmed, and two key executives left the automaker. As Tesla gears up for its next growth phase, the focus is on cutting costs and improving productivity. Unfortunately, layoffs have been a significant part of this effort, with approximately 10 to 20 percent of Tesla's global workforce being let go.
2. compensation package
   Tesla (TSLA) shareholders overwhelmingly approved the long-awaited compensation package originally agreed upon in 2018. The package, which had been previously rejected by a Delaware judge last year, is set to pay CEO Elon Musk approximately $55.8 billion.
3. robotaxi
   Elon Musk has discussed the concept of "robotaxis," which refers to autonomous electric vehicles capable of operating as self-driving taxis. Musk envisions Tesla vehicles equipped with autonomous driving technology being deployed as robotaxis, providing a new form of transportation service where passengers can summon a self-driving car through an app and travel to their destination without a human driver.
   Elon musk focuses on his robotaxi-launch event in August and his longer-term ambitions to transition Tesla into an AI-market leader. Tesla will focus on developing a fleet of autonomous robotaxis, while exploiting the power of its AI supercomputer, over its traditional carmaking roots.
4. prices cutting
   A year ago, Tesla reported earning $2.5 billion in the first quarter of 2023, achieving one of the industry's highest profit margins. However, recent price cuts, including those implemented last week, have reduced the profit per vehicle sold. Initially, these reductions boosted sales, but Tesla now faces challenges in attracting buyers even with lower prices. By adjusting prices, Tesla seeks to manage demand, increase market share, and maintain its position as a leader in the electric vehicle market. These pricing decisions are influenced by factors such as production costs, economies of scale, technological advancements, and global market dynamics.

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Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice.