Tesla Q2 shipments meet analyst estimates as chip shortage weighs in

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  • Shares advance after record vehicle deliveries
  • Musk warned of shortages of crisps and materials
  • Tesla generates 99% of Model 3, Model Y shipments
  • Shipments of more expensive models plummet
  • All eyes are on second quarter results

July 2 (Reuters) – Tesla Inc (TSLA.O) posted record second-quarter vehicle deliveries on Friday, in line with Wall Street estimates, with the electric car maker facing a chip shortage and relying on sales of its cheapest. models.

Tesla has weathered the global supply crisis better than traditional automakers, but CEO Elon Musk has warned of the challenges of securing chips and raw materials.

Now all eyes are on its second quarter results to see if recent declines in bitcoin prices would have a negative effect on Tesla’s results, due to Tesla’s exposure to cryptocurrency volatility.

Tesla delivered a total of 201,250 vehicles in the second quarter. Analysts expected Tesla to deliver 200,258 vehicles, according to data from Refinitiv.

“It was a solid quarter in terms of volume, but I see it as a modest disappointment,” said Garrett Nelson, equity analyst at CFRA Research.

Shares of the company edged up 0.3%, after rising 3.3% at the start of trading on Friday.

“Overall, the bulls breathe a sigh of relief with these delivery numbers,” said Dan Ives, analyst at Wedbush Securities.

Deliveries of its Model 3 sedans and Model Y crossovers, its two cheapest variants, accounted for 99% of its deliveries, offsetting lower deliveries of high-end Model S and X vehicles.

“Our teams have done an outstanding job navigating through global supply chain and logistics challenges,” Tesla said.

Tesla has raised the prices of its vehicles in recent months, which billionaire boss Elon Musk blamed in May on “pressure on prices in the supply chain”, especially raw materials. Read more

He also said in early June that “Our biggest challenge is the supply chain, especially microcontroller chips. Never seen anything like it.”

A Tesla compressor is shown at a charging station in Santa Clarita, California, United States, October 2, 2019. REUTERS / Mike Blake

Read more

Brokerage firm RBC said “the worst could be over for Tesla” with the chip shortage, but added that the potential impact on the margins of a large supply chain could linger throughout the period. year.

CHINA, MODEL S PLAID

In China, a major growth market for Tesla, the company faces large-scale recalls, increased scrutiny from regulators and the public, as well as increasing competition from local electric vehicle companies. Read more

“Demand issues were around China in April but clearly rebounded in May and June,” Ives said.

Tesla sold 21,936 Model 3 and Model Y cars to Chinese customers in May, rebounding from falling sales in April, but still well below March figures. read more Its sales in China for June will be published in the coming days.

Tesla saw deliveries of its Model S and X vehicles drop to 1,890 during the April to June period, as a new version of its Model S suffered delays before its launch in June. Read more

A Tesla Model S Plaid electric vehicle priced at $ 129,990 caught fire on Tuesday while its owner was driving, just three days after the car was delivered. The owner’s lawyer requested that the model be grounded. Tesla did not comment immediately when contacted by Reuters. Read more

BITCOINS

The sharp declines in bitcoin prices could also weigh on Tesla’s second-quarter earnings, analysts said.

On February 8, Tesla unveiled its $ 1.5 billion bitcoin investment. read more His bitcoin holdings helped generate profits in the first quarter, selling 10% of them.

But the investment also exposes Tesla shares to volatile cryptocurrency prices, which have suffered from the recent drops.

“The Tesla share price has been quite closely correlated with the price of bitcoin,” Nelson said, adding that this is hurting investor sentiment, although bitcoin is only a small portion of Tesla’s overall cash flow. .

Reporting by Hyunjoo Jin in Berkeley, CA, Akanksha Rana and Subrat Patnaik in Bengaluru; Editing by Sriraj Kalluvila, Saumyadeb Chakrabarty, Aurora Ellis and Philippa Fletcher

Our standards: Thomson Reuters Trust Principles.

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