Q3 Earnings Alert! Plan early for this week’s stock reports with all key data in 1 placeSee list

Tesla's quarterly deliveries set to rise as China incentives lure wary EV buyers

Published 09/30/2024, 01:34 PM
Updated 10/01/2024, 05:41 AM
© Reuters. FILE PHOTO: Tesla China-made Model 3 vehicles are seen during a delivery event at its factory in Shanghai, China January 7, 2020. REUTERS/Aly Song/File Photo
TSLA
-

By Akash Sriram and Abhirup Roy

(Reuters) - Tesla (NASDAQ:TSLA) is expected to report an 8% jump in third-quarter deliveries of its electric vehicles on Wednesday, Wall Street estimates show, driven by extended incentives and lucrative financing plans in the world's largest auto market, China.

Responding to sluggish Chinese spending amid flagging economic growth and rising competition from domestic Chinese players such as BYD (SZ:002594), Tesla introduced a range of offers this spring, including insurance deals, discounts on certain paint choices and a zero-interest loan of up to five years.

That helped the U.S. automaker boost sales in July and August, according to data from the China Passenger Car Association (CPCA), after two straight quarters of declining deliveries.

Analysts said the trend continued through the quarter and 12 of them, polled by LSEG, expect the Elon Musk-led company to deliver 469,828 vehicles, which would be its best third quarter, up from about 435,000 vehicles a year earlier.

"China, which accounts for one-third of Tesla's sales, is a major growth driver," said Scott Acheychek, chief operating officer of REX Financial, which offers exchange-traded funds that track Tesla's stock performance.

Deutsche Bank analysts estimated Tesla to deliver about 139,000 Model 3 sedans, 296,400 Model Y SUVs, a combined 13,350 of its larger Model S sedans and Model X SUVs and about 13,500 Cybertruck pickups in the third quarter. 

Sales in China were also boosted by increased government subsidies meant to encourage consumers to swap their gas-guzzling vehicles with battery-powered ones.

Tesla cars also became eligible for government purchases in the country, with its best-selling Model Y SUV included in a list of vehicles government entities can purchase as a service car.

Ken Mahoney, CEO of Tesla investor Mahoney Asset Management, said the boost from China, along with benefits of a recent interest rate cut by the U.S. Federal Reserve, could help Tesla match the record 1.8 million vehicles delivered in 2023.  

Musk earlier this year said Tesla was on track for higher deliveries in 2024.

Tesla started deliveries of the Cybertruck late last year, and the EV maker expects to ramp up production to 250,000 units next year. It is yet to release official production or delivery numbers for the model.

© Reuters. FILE PHOTO: Tesla China-made Model 3 vehicles are seen during a delivery event at its factory in Shanghai, China January 7, 2020. REUTERS/Aly Song/File Photo

With slowing demand for EVs in the U.S. and a lack of subsidies in Europe, Tesla delivered about 831,000 vehicles in the first half of this year. To prevent a drop in 2024 deliveries, it needs to hit about 979,000 vehicles in the second half.

That will be crucial to allay investor concerns around future EV demand even as they focus on Tesla's unveiling of a robotaxi product on Oct. 10 - a sharp shift in the automaker's strategy since ditching its affordable car project and one that some see unlocking trillions of dollars in value for Tesla.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.