On Tuesday, Truist Securities maintained its Hold rating on Tesla (NASDAQ:TSLA) shares with a price target of $162.00. Tesla (NASDAQ:TSLA) reported its second-quarter unit deliveries, which slightly exceeded consensus expectations. The company announced that deliveries for the quarter stood at 444,000 units, a 1.7% increase over the FactSet consensus of 437,000 units and approximately 1.5% higher than the company's own estimate of 438,000 units. Despite this, the delivery numbers represented a 5% year-over-year decline.
Tesla's production for the quarter was approximately 7.5% lower than its deliveries, totaling 410,800 units. This figure marked a roughly 14% decrease compared to the same period last year. Truist Securities noted that the company did not provide specific reasons for the lower production figures but suggested that it could be due to retooling for upcoming new model introductions.
The analyst from Truist Securities also pointed out that Tesla ended the first quarter with 82 days of inventory, the highest since the first quarter of 2020, and significantly above the average of approximately 60 days over the previous eight quarters. Additionally, Tesla reported having 28 days of global vehicle inventory in the first quarter, the highest since the first quarter of 2019 and nearly double its four-quarter average of 15 days.
Given the delivery and production numbers released today, Truist Securities anticipates that Tesla's balance sheet inventory will decrease to around 70 days in the second quarter. Although still above the norm, this would be a reduction from the previous quarter and more in line with historical levels.
In other recent news, Tesla has reported surpassing second-quarter vehicle delivery predictions, with a total of 443,956 units delivered, a 14.8% rise from the first quarter. This performance is attributed to pricing adjustments that spurred customer demand. However, Tesla's sales of electric vehicles manufactured in China experienced a 24.2% decline year-over-year in June. In contrast, Chinese automaker BYD (SZ:002594) reported a substantial 21% increase in its EV sales for the second quarter, signaling a tightening race with Tesla.
On another note, Polestar (NASDAQ:PSNY) reported a first-quarter operating loss of $231.7 million due to significant tariffs on its China-produced EVs. The company is planning measures to mitigate these impacts, including adjusting its production strategy to lessen its dependency on Chinese manufacturing.
Meanwhile, Citi maintains a neutral stance on Tesla's stock, following the company's announcement of its second-quarter vehicle deliveries and production numbers. Citi anticipates a favorable reaction in the stock price following the delivery and production report. These are some of the recent developments in the EV sector.
InvestingPro Insights
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