Tesla Stock Popped Ahead of Q2 Deliveries, Here is Why

Tesla stocks have been on the comeback trail recently, and that continued on the first trading day of July. Shares of the leading electric vehicle maker were higher by 5.5% on Monday morning. The stock is now up by about 18% over the past month.

Today’s leap comes just one day before Tesla’s report on Q2 delivery data. While estimates have been trending lower, delivery reports from Chinese EV makers today led investors to further optimism about what the American company will reveal in the following 24 hours.

Important Chinese EV Market

The Chinese EV market has been crucial for Tesla, whose most productive factory is in Shanghai. Today, several Chinese EV makers reported strong June and Q2 deliveries. That might carry potential for what Tesla has to share tomorrow.

Larger BYD, Nio, Li Auto and XPeng showed YoY growth in battery-electric vehicle sales for the quarter. The period seemed to end on a strong note, as Nio delivered a monthly record 21,209 vehicles in June. That was nearly twice what it shipped in June 2023.

Many EV observers have been closely watching the larger BYD, whose BEV volume is more in line with that of Tesla. BYD sold more than 426,000 fully electric vehicles in the second quarter, up about 21% year over year.

Tesla analysts have been lowering estimates for its Q2 sales, with most recent projections averaging about 420,000 EVs. That would be down from about 466,000 delivered in the prior-year period. It would also be the second quarterly period where BYD outsold Tesla to be the world’s largest EV seller.

With China’s EV market seemingly recovering, it could result in Tesla beating estimates. Even after that data is released, though, shareholders will want to continue to pay attention to what Tesla says about profit margin when it releases its full Q2 financial report.

If the sales in China are coming from reduced prices, the boost in it shares might be short-lived. Analysts believe that there are 10 best stocks for investors to buy now, yet Tesla wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

The company was expected to deliver 438,019 vehicles for the April to June period, according to an average estimate based on forecasts from 12 analysts polled by LSEG, seven of whom slashed their expectations in the past three months. The EV maker was expected to announce the results on Tuesday.

Tesla had warned in January deliveries growth in 2024 would be “notably lower” as a boost from months long price cuts waned. Adding to those problems was a consumer shift to cheaper petrol electric hybrid vehicles which had left Tesla with a growing inventory of vehicles it was trying to move with price cuts and incentives including cheaper financing options and leases.