Tesla (TSLA) shares rose more than 10% on Tuesday after the electric car giant reported quarterly vehicle deliveries that beat Wall Street expectations.
The electric carmaker delivered 443,956 vehicles in the second quarter, compared with analysts’ consensus estimate of 439,302, according to Bloomberg.
“In the second quarter, we produced approximately 411,000 vehicles and delivered approximately 444,000 vehicles,” the company said in a statement. Tesla said it delivered 422,405 Model 3/Y vehicles and 21,551 other models by vehicle type.
Total vehicles delivered in the second quarter were higher than the 386,810 vehicles delivered globally in the first quarter, but lower than the approximately 466,140 delivered a year ago.
Despite the decline in deliveries compared to last year, some analysts pointed out that the EV industry is performing better than expected.
“We continue to see room for improvement in sentiment around Tesla shares and broader electric vehicle sentiment, compared to the negative sentiment we have seen over the past six months,” analysts at Citi wrote on Tuesday.
“Going forward, the focus will be on Tesla’s second quarter automotive gross margins to determine price-to-cost (Tesla will report this on July 23), as well as any updates on future product launches,” the note said.
Tesla is facing stiff competition from its Chinese peers abroad amid a slowing electric vehicle market. In an effort to cut costs, Tesla earlier this year began a plan to lay off more than 10% of its global workforce, in what some analysts saw as a sign of tough times ahead.
At Tesla’s shareholder meeting last month, CEO Elon Musk confirmed that demand and sales will still be tough in the near term as the industry is in a transition period.
“It’s a tough call,” Musk said of the electric vehicle market, adding that competitors have also cut back on their investment and production of electric vehicles.
Wells Fargo analysts noted ahead of Monday’s delivery numbers that the company’s gross margin is likely to be affected by a crowded market.
“The flattening of EV adoption in the US and EU, with aggressive competition in China, leaves few immediate levers to increase volumes,” wrote Colin Langan and his team. The firm has an Underweight rating on the stock with a $120 price target.
Tesla doesn’t publish sales figures for the Cybertruck, but investors have hinted that deliveries could pick up based on recalls. Last month, Tesla announced its fourth Cybertruck recall since the vehicle launched late last year. The recall notice appeared to affect 11,688 trucks.
In preparation for deliveries, Tesla shares rose more than 6% on Monday as Chinese peers Li Auto (LI), Nio (NIO) and XPeng (XPEV) reported better-than-expected deliveries.
Tesla shares have risen more than 55% since their 52-week low on April 22. The stock is down nearly 7% so far this year.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X on @ines_ferre.
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