Tesla Q2 Earnings: Impressive Deliveries, But Only With Lower Gross Margins

  • Tesla, Inc. has recently seen a 78% rally due to better-than-expected vehicle deliveries, but this growth is largely attributed to significant price cuts, which may impact the company’s margins.
  • Despite a 35% price cut on all models, Tesla only saw a 10% growth in deliveries, suggesting weak underlying demand. Further price cuts could put pressure on the stock.
  • The FY2023 earnings consensus has been revised by -39%, but Tesla’s stock price is 10% higher than at the peak earnings consensus period, indicating the stock is trading on overly bullish sentiment.

Investment Thesis

Tesla, Inc. (NASDAQ:TSLA) has achieved an impressive 160% YTD growth, primarily driven by multiple headline news. Factors contributing to this growth include the increasing adoption of TSLA’s NACS, better-than-expected vehicle deliveries resulting from significant price reductions, and a