banner

Tesla braces for earnings hit, but EV delivery outlook is the key.

Tesla Inc's (TSLA.O) second-quarter results on Wednesday are expected to show the strains of China's COVID-19 lockdown and protracted start-ups of new factories.


Tesla braces for earnings hit, but EV delivery outlook is the key

July 19 (Reuters) - Tesla Inc's (TSLA.O) second-quarter results on Wednesday are expected to show the strains of China's COVID-19 lockdown and protracted start-ups of new factories. Investors urge to know the performance of Tesla in terms of growing better. Tesla has started layoffs, following through on a plan by Chief Executive Elon Musk, who said he had "a super bad feeling about the economy" in June. He also has said Tesla's new factories in Austin, Texas, and Berlin are "gigantic money furnaces" which are losing billions of dollars. 

The growing competition from electric vehicle makers and COVID-19 in Shanghai adds concern to the home of Tesla's China factory and its suppliers. Curzio Research CEO Frank Curzio said, "The expectations are very low for the quarter. The key to this is what they're going to say going forward because expectations for the second half of this year are strong for this company," 

Analysts expect the electric vehicle market leader to report second-quarter revenue of $17.23 billion, an 8% decline from a record high achieved the previous quarter. Analysts also expect an adjusted profit of $1.86 per share, a 42% slump from a quarter ago, according to definitive data says the source. 

Musk in April said Tesla could raise deliveries by 60% this year, which would translate into nearly 1.5 million vehicles. Wedbush analyst Daniel Ives said many analysts expect closer to 1.4 million deliveries and want to hear whether Musk is still bullish about demand amid recession fears. Tesla delivered 564,743 vehicles in the first half. It delivered 17.9% fewer EVs in the second quarter than the previous quarter as China's COVID 19-related shutdown hit its factory and supply chain. 

Tesla navigated supply-chain challenges better than rivals early in the pandemic, and Deutsche Bank analyst Emmanuel Rosner said high prices and cost-cutting could help Tesla pleasantly surprise investors. The price of Tesla's Model Y long-range version, now $65,990, has risen more than 30% since the start of 2021. The production outlook for the second half will depend on the factory in Shanghai, which has emerged from a two-month lockdown and is scrambling to contain a resurgence of COVID-19. The competitive landscape is also heating up.

Volkswagen AG's (VOWG_p.DE) CEO, Herbert Diess, sees a strong second half of 2022 and expects progress in catching up with Tesla due to easing chip shortages. Meanwhile, Musk tweeted in June that "Hyundai is doing pretty well," referring to the South Korean automaker that has been gaining U.S. market share.

Musk may also need to talk about issues beyond production and demand, including his effort to escape from a deal to buy Twitter Inc (TWTR.N). Other issues include progress on Tesla's plan to achieve full self-driving following the resignation of a high-profile executive, and progress on Tesla's new batteries needed to boost production at its Texas factory. The value of Tesla's bitcoin holdings has declined and will lead to impairment charges of hundreds of millions of dollars, according to analysts' estimates, says the source.

Source: https://www.reuters.com/business/autos-transportation/tesla-braces-earnings-hit-ev-delivery-outlook-is-key-2022-07-19/

Source

you may also like