Advertisement
Tesla’s shares experienced a dramatic turnaround this week, climbing 27% and bringing its price back to levels above where it ended 2023. This surge wiped out earlier losses for the year and reflects a notable recovery from a low of $138.80 in April.
Key Drivers:
- Second-Quarter Deliveries: The rally was triggered by a better-than-expected second-quarter deliveries report, despite a 4.8% drop from the previous year. The smaller decline compared to the first quarter’s drop gave investors renewed optimism.
- Discounts and Incentives: Tesla has been offering substantial discounts and incentives to boost sales of its aging lineup, including the Model 3, Model Y, Model S, and Model X.
- Cybertruck Success: The launch of the Cybertruck has been a highlight. Tesla’s Cybertruck was reported as the bestselling fully electric pickup in the U.S. for the second quarter.
Future Prospects:
- Upcoming Earnings Report: Tesla is set to release its second-quarter financial results on July 23. Investors will closely watch automotive gross margins.
- Robotaxi Day: Analysts from Cantor Fitzgerald anticipate that Tesla’s Robotaxi Day, scheduled for August 8, could act as a significant stock catalyst. While a Robotaxi launch is expected to be years away, it’s seen as a long-term growth opportunity.
- Market Position: Despite the recent gains, Tesla is still lagging behind broader market indices. The Nasdaq and S&P 500 have risen 22% and 17%, respectively, in 2024, while Tesla is up only 1.2%.
Challenges and Criticisms:
- Brand Perception: Recent polls indicate that Tesla is experiencing brand deterioration, partly attributed to Elon Musk’s controversial statements and political activities.
- Self-Driving Technology Delays: Tesla continues to face delays in delivering its promised full self-driving capabilities. Musk had originally announced in 2016 that all Tesla cars were equipped with hardware for self-driving, but further hardware and sensor updates are still in development.
Tesla’s significant weekly rally has helped it recover its losses for the year, driven by improved delivery figures, successful Cybertruck sales, and strategic discounts. However, the company still faces challenges, including brand perception issues and delays in autonomous driving technology.