MW Tesla's sales show company is weathering chips shortage better than other auto makers
Claudia Assis
Tesla Inc.'s strong quarterly sales prompted Wall Street to praise the Silicon Valley car maker for navigating the ongoing chip and parts shortage and setting itself up for growth.
Earlier Friday, Tesla $(TSLA)$ said it produced 206,421 vehicles and delivered 201,250 in the second quarter, roughly in line with broader analyst consensus and a record for the company. That included 204,081 Model 3 sedans and Model Y compact SUV.
"Our teams have done an outstanding job navigating through global supply chain and logistics challenges," Tesla said in a statement.
Analyst Joseph Spak with RBC Capital agreed: "Encouragingly, production outpaced deliveries, and was up (quarter on quarter)," showing Tesla managing through the shortages, he said in a note Friday.
"On production, the worst may be over for Tesla from a (semiconductor) shortage standpoint," although the key will be any potential margin impacts from additional supply issues that could continue through the year, he said.
Tesla stock wavered between gains and losses after the sales and production news. The stock has fallen 4% so far this year, contrasting with gains of around 16% for the S&P 500 index.
There have been concerns recently about Tesla sales in China, where the company has faced some backlash over how it handled consumer complaints, and where a recent recall stoked more worries. Tesla also has had to grapple with more competition from Chinese EV makers.
Also on Friday, rival Li Auto Inc. $(LI)$ reported record June and second-quarter sales for its Li One, and new orders for the car topped 10,000, the company said.
For Gene Munster with Loup Ventures, the quarter sales and production numbers "are further evidence of a true growth story" on a combination of "consumer willingness to purchase EVs, along with Tesla's winning formula of vehicle performance and value."
Related: U.S. falls further behind China and Europe in making electric vehicles
Tesla is also likely on track to meet or top Wall Street sales expectations for the year, he said. The company has delivered 386,000 vehicles in the first six months, and the consensus for the year hovers around 853,000.
Typically, Tesla sells between 55% and 59% of its vehicles in the second half of the year, "which implies the company's on pace to deliver between 850,000 and 900,000 vehicles this year," he said.
Tesla has not provided specific 2021 sales guidance, saying in April that it plans to grow its manufacturing capacity "as quickly as possible," and that over "a multiyear horizon, we expect to achieve 50% average annual growth in vehicle deliveries. In some years we may grow faster, which we expect to be the case in 2021."
Friday's quarterly sales "illustrate how effectively the auto maker is riding the global EV wave," said iSeeCars.com analyst Karl Brauer.
Tesla "has worked to position itself for this shift over the past two years, with expanded production in multiple locations," he said. "Its effort is paying off as government incentives and consumer demand for electric vehicles rise in the world's largest markets."
Moreover, Tesla's costs are likely dropping as volume rises, meaning the company is well-positioned for both the near and longer term, he said.
-Claudia Assis; 415-439-6400; AskNewswires@dowjones.com
$(END)$ Dow Jones Newswires
July 06, 2021 07:58 ET (11:58 GMT)
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