Tesla Missed High Sales Expectations. Will Robotaxi Also Disappoint?
- by Investopedia
- Oct 02, 2024
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Colin is an Associate Editor focused on tech and financial news. He has more than three years of experience editing, proofreading, and fact-checking content on current financial events and politics. He received his M.A. in journalism from The New School and his B.A. in history and political science from McGill University.
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Key Takeaways
Tesla shares slid on Wednesday after the EV maker's quarterly deliveries came in short of official estimates, and even further short of whisper numbers.
Tesla sales are estimated to have been relatively strong in China, where pricing incentives and government subsidies spurred record EV sales in September.
Tesla is just one of the Magnificent Seven stocks that has been dinged by the market's lofty expectations in recent months.
Investors now turn their attention to next week's highly anticipated Robotaxi event.
Shares of Tesla (TSLA) slid Wednesday after the electric vehicle (EV) maker’s third-quarter deliveries came in slightly below estimates, underscoring the challenges of the EV market and the burden of high expectations.
Tesla delivered 462,890 cars last quarter, a marked improvement over the two prior periods in which deliveries declined on a year-over-year basis. The figures were also just a few hundred vehicles shy of the consensus estimate among analysts, according to FactSet.
Tesla will need to maintain its third-quarter sales growth rate (+6.3%) if it’s going to sell as many cars as it did last year. Failure to do so would mark the carmaker’s first full-year sales decline on record.
Chinese EV Sales Rebound
Tesla faces stiff competition, especially in China, the world’s largest auto market, where local manufacturers enjoy the benefits of lower production costs. Chinese giant BYD (BYDDY) sold a record 417,603 passenger vehicles—both electric and hybrid—in September.
Tesla has attempted to grow its market share by cutting prices in China repeatedly over the last two years and offering Chinese buyers financing and insurance incentives. Tesla's margins have shrunk in the process. They will be a key focus for investors when the company reports earnings on Oct. 23.
Wedbush analysts, in a note on Wednesday, estimated that promotional activity contributed to relatively strong sales in China last quarter. A slowdown in the U.S. and Europe, however, likely offset that strength.
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