On Friday, Tesla’s stock price rose significantly to wipe out its loss for the year and bring its gain for the week to 27%. The electric vehicle maker closed Friday at $251.55, compared to $248.48 at the end of last year and a low of $138.80 in April. The rally was sparked by a better-than-expected deliveries report for the second quarter, where deliveries dropped 4.8% from a year earlier but the decline was less steep than in the first quarter, giving investors hope for the second half of the year. This positive report comes after a series of troubling developments in April, including falling sales, layoffs, and reports of scrapped plans for a low-cost family car production at Tesla’s Texas factory.
Tesla is set to release its second-quarter financial results on July 23, with the focus likely on automotive gross margins. The company has been offering discounts and incentives to attract customers to its aging lineup of electric vehicles, including the popular Model 3 and Model Y. The Cybertruck, introduced in late 2023, has become the bestselling fully electric pickup in the U.S. in the second quarter, surpassing Ford’s fully electric F-150 Lightning in sales. Tesla’s upcoming Robotaxi Day, scheduled for early next month, is expected to be another catalyst for the company’s stock. Cantor Fitzgerald analysts predict that Tesla may deliver fewer cars this year compared to last, but still recommend buying the stock with a price target of $230.
Despite the recent stock rally, Tesla is still lagging behind the broader market for the year, with the Nasdaq up 22% and the S&P 500 up 17% in 2024, while Tesla is up only 1.2%. The company is also facing challenges with brand deterioration, as polls have suggested that Elon Musk’s controversial statements and political activities are driving away some consumers. Additionally, Tesla has faced delays in delivering software that would enable its existing vehicles to become self-driving cars. Musk had announced in 2016 that all Tesla cars being produced at that time had the necessary hardware for self-driving capabilities, but as of late June, another hardware and sensor setup is on the way to enable this functionality.
Looking ahead, the long-term outlook for Tesla remains positive, with the expectation that the Robotaxi segment could be a significant business segment for the company in the future. While some concerns and challenges persist, such as brand perception and self-driving technology delays, Tesla continues to innovate and maintain a leading position in the electric vehicle market. Investors will be eagerly awaiting the company’s second-quarter financial results and upcoming developments, including the Robotaxi event in August. With the potential for growth and innovation in the EV space, Tesla’s stock performance and market position are likely to remain in focus among investors and industry analysts in the coming months.
