Tesla Tops 200,000 Deliveries For The First Time In Q2

Tesla, Inc. TSLA reported record quarterly deliveries for the second quarter despite worries about a slowdown in China pulling down overall performance. The performance, however, was shy of estimates by some analysts.

Tesla's Record Quarter: Tesla reported deliveries of 201,250 vehicles in the quarter, representing a quarterly record. The number represented a 122% year-over-year increase and roughly 9% quarter-over-quarter growth from the 184,800 units the EV maker delivered in the first quarter.

The break-up of the deliveries showed 199,360 Model 3/Y vehicles and 1,890 Model S/X vehicles. Model S/X deliveries dipped from 2,020 in the first quarter.

Analysts, on average, had estimated deliveries of 201,000 for the quarter. Credit Suisse analyst Dan Levy predicted sales to come in anywhere between 205,000 and 210,000 vehicles, with upside constrained by supply and China.

The company said the delivery count should be viewed as slightly conservative, as a car is considered as delivered if it's transferred to the customer and all paperwork is correct. Final numbers could vary by up to 0.5% or more, it cautioned.

The company produced 206,421 vehicles in the second quarter, comprising 204,081 Model 3/Y vehicles and 2,340 Model S/X vehicles.

On Thursday, Tesla's Chinese peers Nio, Inc. NIO and XPeng, Inc.'s XPEV also reported record quarterly deliveries. Nio delivered 21,896 vehicles for the quarter, while XPeng clocked in a quarterly total of 17,398.

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Tesla Defying China Scare, Industrywide Concerns: Tesla's numbers appear commendable against the backdrop of worries of a slowdown in China sales. Estimates published by the China Passenger Car Association showed that Tesla sold 59,308 vehicles in the April-May period. Sales fell 27% month-over-month in April before bouncing back in May.

The company faced several issues in China, including safety issues that forced users to protest and government restriction in use of Tesla vehicles in sensitive areas due to fears of spying by camera installed in the vehicle.

To top it, the company announced a recall of over 285,000 cars in China, almost all of it has sold in China over the year, to address safety issues on autopilot identified by a Chinese regulator.

China accounts for more than one-third of Tesla's sales and margins for made-in-China are higher than those manufactured in the U.S.

Tesla also had to contend with semiconductor and component shortages, which affected the industry as a whole.

What Lies Ahead For Tesla: Tesla has recently begun selling the Model S Plaid vehicle and also a refreshed model of the Model S. These could lift the Model S numbers in the near term. Tesla's outperformance ultimately depends on how it can ward off competition in China.

The immediate catalyst is the second-quarter earnings release, as investors look ahead to margin improvement from its core business. Analysts, on average, estimate EPS of 96 cents per share on $11.22 billion for the quarter.

TSLA Stock: Tesla stock, which rallied to a high of $900.40 in late January, has given back much of its gains. The stock ended the first half of the year down 3.7%.

The stock was up 1% to $684.91 at publication time.