Tesla Stock Price Surges as Deliveries Beat Expectations

Tesla's share price surged over 10% on Tuesday, reaching its highest level since early January, after the electric vehicle (EV) manufacturer reported auto deliveries that exceeded analyst expectations. Tesla shares closed 10.20% higher at $231.26.

Tesla, led by billionaire Elon Musk, announced that it delivered approximately 443,950 vehicles worldwide in the April-June period, surpassing Wall Street's average estimate of 439,302 vehicles.

Although Tesla's sales during the second quarter were down 4.7% compared to the same period last year, the EV maker's deliveries increased sequentially from the 386,810 vehicles sold in the first three months of the year. The company sold 422,405 units of Model 3 and Model Y vehicles but did not provide a detailed breakdown of the other autos delivered.

According to Bloomberg, Tesla produced 410,831 vehicles during the second quarter, representing a 14% decrease compared to the same period last year. This production figure included 386,576 Model 3 and Model Y vehicles.

In the first half of the year, Tesla sold 830,766 EVs globally, surpassing China's BYD, which sold 726,153 EVs.  

The better-than-expected deliveries triggered a more than 10% rally in Tesla stock price on Tuesday. Despite the stock having fallen nearly 7% so far this year, it has recovered significant losses from earlier months. Tesla shares have surged over 60% since hitting a 52-week low in April. Over the past month, Tesla shares have increased by more than 30%.

The higher-than-expected deliveries data "greatly assuages concerns regarding softening EV demand," CFRA Research analyst Garrett Nelson said. "The stock continues to ride a wave of positive momentum following its annual meeting in mid-June in which shareholders re-approved Musk’s 2018 compensation plan," he said, referring to CEO Elon Musk.

While the stock rebound and impressive delivery figures were seen by some analysts and investors as potential indicators of improvement for Tesla ahead of its robotaxi reveal on August 8, others expressed concerns. According to research firm Edmunds, there is worry that Tesla may be depleting its "bag of tricks" with its frequent price cuts and increased incentives.

Tesla has been slow to update its car lineup, which is a concern as rivals, particularly in China, are introducing new affordable models. Additionally, high interest rates are dampening demand, adding to the challenges faced by the company.

Despite the challenges facing its core car business, investors overwhelmingly supported Elon Musk's record $56 billion pay package at the meeting. Board chair Robyn Denholm stated before the vote that reinstating the pay package was essential for "retaining Elon's attention and motivating him."