Shares of Tesla (NASDAQ: TSLA) have been on a comeback trail recently, and that continued on the first trading day of July. Shares of the leading electric vehicle (EV) maker were up 5.5% as of 11:10 a.m. ET Monday morning. The stock is now up about 18% over the past month.
Today’s jump comes just a day before Tesla is expected to report its second-quarter EV delivery data. While estimates have been trending downward, delivery reports from Chinese EV makers are making investors more optimistic about what the U.S. company will say.
The important Chinese market for electric vehicles
The Chinese EV market has been crucial for Tesla, whose most productive factory is in Shanghai. Today, several Chinese EV makers reported strong deliveries in June and the second quarter. That could bode well for what Tesla has to offer tomorrow.
Nio, Li Auto, XPengand the bigger by D all showed year-over-year growth in battery electric vehicle (BEV) sales for the quarter. The period appeared to end strongly, as Nio delivered a monthly record of 21,209 vehicles in June. That was almost double what it shipped in June 2023.
Many EV observers have been keeping a close eye on the larger BYD, whose BEV volume is more in line with Tesla’s. BYD sold more than 426,000 fully electric vehicles in the second quarter, an increase of approximately 21% year on year.
Tesla analysts have cut estimates for second-quarter sales, with the most recent projections averaging about 420,000 electric vehicles. That would be down from about 466,000 units delivered in the same period last year. It would also be the second quarter in which BYD surpassed Tesla to become the world’s largest EV seller.
Now that China’s EV market appears to be recovering, Tesla could beat estimates. But even after that data is released, shareholders will want to keep paying attention to what Tesla says about profit margins when it releases its full second-quarter financial report. If China sales come from lower prices, the stock’s rally could be short-lived.
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Howard Smith has positions in BYD Company, Nio, Tesla and XPeng. The Motley Fool holds and recommends positions in BYD Company, Nio, and Tesla. The Motley Fool has a disclosure policy.
Why Tesla Stock Soared Ahead of Second Quarter Deliveries was originally published by The Motley Fool
