Tesla to Announce Sales Figures Tomorrow: Anticipated 5.4% Drop

Tomorrow will be a critical day for Tesla as the company is set to announce its sales figures for the second quarter. Analysts predict a continued downturn, with Tesla expected to report 441,019 electric vehicle deliveries for Q2, representing a 5.4% decline from the same period last year, according to Bloomberg. This would mark the second consecutive quarterly drop, a trend not seen since 2012 when Tesla phased out its first model, the Roadster.

Running Out of Excuses

Tesla has overcome several challenges that plagued it earlier this year, including a suspected arson attack at its factory near Berlin and supply chain disruptions related to the conflict in the Red Sea. With these issues behind them, the company has few remaining excuses for its sales decline, apart from a straightforward problem: Tesla’s older vehicle lineup is struggling to compete with the newer offerings from rival electric car manufacturers. “It’s harder to grow when competition increases and the current model lineup feels a bit dated,” said Tom Narayan, a global automotive analyst at RBC Capital Markets, who has a buy rating on Tesla’s stock.

CEO Elon Musk has taken various steps to boost demand for Tesla vehicles, including price cuts and attractive leasing deals. However, these discounts failed to prevent a decline in sales during the latter half of last year, and sales continued to falter amid a broader cooling of the electric vehicle market.

In April, Musk announced significant layoffs, affecting over 10% of Tesla’s workforce, including sales staff. While this move may have helped the company save money, it could also have impacted delivery numbers in the second quarter.

First-time electric car buyers often have numerous questions about battery range, charging stations, and software features. Nevertheless, Musk is increasingly pushing for an online sales process, encouraging customers to order Teslas without visiting a showroom.

Struggling to Replicate Success

Tesla is finding it challenging to replicate the success of the Model Y, which was the world’s best-selling vehicle last year. The SUV has been on the market since 2020, while the Model 3 sedan launched three years earlier. The company’s first pickup, the Blade Runner-inspired Cybertruck, has had a slow start since production began late last year. The truck has already faced multiple recalls, including issues with the accelerator and windshield wiper.

Investors have been relatively calm despite several analysts lowering their estimates for Tesla’s vehicle deliveries in recent weeks. While the stock is still down 20%, Elon Musk has bolstered investor confidence with promises of new models later this year. He has also highlighted the prospects for the company’s humanoid robots and plans to unveil a dedicated robotaxi in August.

Last month, Musk received a significant vote of confidence when shareholders approved his $56 billion compensation package. “We are seeing a growing number of investors shifting their focus to the robotaxi event on August 8,” wrote Ben Kallo, a Robert W. Baird analyst with a buy rating on Tesla’s stock, in a report last week. “We view Q2 deliveries as particularly important for full-year numbers and whether 2024 will be a growth year, but we expect focus to remain on long-term development until the robotaxi unveiling.”

Kallo expects Tesla to deliver 435,200 vehicles this quarter and about 1.83 million for the entire year, only slightly above the 2023 figures. While the company promised in April to introduce new models by early next year, it provided no specifics about the cars and reiterated that growth in 2024 would be “significantly lower.”