Tesla rises 3% after it delivers more than 200,000 vehicles during the quarter despite chip shortage

Elon Musk Shanghai
Tesla CEO Elon Musk attends the groundbreaking ceremony of Tesla Shanghai gigafactory in Shanghai, East China.

  • Tesla gained as much as 3% on Friday after it said it delivered 201,250 vehicles during the second quarter.
  • Results were driven by sales of the Model 3 and Y, and were about in-line with analyst estimates.
  • “Congrats Tesla Team on over 200,000 car built & delivered in Q2, despite many challenges!!” Elon Musk tweeted.
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Shares of Tesla gained as much as 3% on Friday after the company said it delivered 201,250 vehicles during the second quarter.

Those results were about in-line with analyst estimates of 201,820 vehicles delivered, according to a Friday note from Wedbush analyst Dan Ives. Tesla’s delivery figures were driven by the success of its Model 3 and Model Y, which represented 199,360 of the vehicles delivered. That beat analyst estimates of 194,770.

Meanwhile, Tesla’s delivery of 1,890 higher-margin Model S and Model X vehicles missed analyst estimates of 5,550.

In a tweet on Friday, Musk congratulated the Tesla team on its delivery figures: “Congrats Tesla Team on over 200,000 car built & delivered in Q2, despite many challenges!!”

Those challenges referenced by Musk include semiconductor shortages, which has hampered production for automakers across the globe.

Tesla “yet again defied the skeptics and bears calling for a sizable miss with the chip shortage and China PR issues lingering in the month of April,” Ives said.

Tesla saw a 27% decline in China vehicle sales for the month of April following multiple PR issues related to quality concerns and protests during the Shanghai auto show.

Despite the issues, Tesla is on track to hit around 900,000 vehicle deliveries for 2021, considered a major stretch goal at the beginning of the year, according to Ives.

And based on Tesla’s second quarter production of 206,421 vehicles, “some of the supply chain issues are starting to moderate for Tesla,” Ives said.

Ives reiterated his “Outperform” rating and $1,000 price target for Tesla, representing potential upside of 48% from Thursday’s close.

Tesla stock chart
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Nio rises as Citi upgrades the car maker and says the stock could soar 50% on demand for electric vehicles in China

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A Nio EVE EP9 All-Electric Supercar is on displayed during the 19th Shanghai International Automobile Industry Exhibition at National Exhibition and Convention Center on April 21, 2021 in China.

  • Nio rose Tuesday after Citi upgraded the Chinese EV maker to “buy” from “neutral.”
  • Citi raised its price target to $58.30 from $57.60, implying potential upside of 50%.
  • In May, Nio’s vehicle delivery was adversely impacted for several days due to a semiconductor supply shortage.
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Shares of Nio rose 4% on Tuesday after Citi upgraded the Chinese car maker to “buy” from “neutral,” citing a surge in demand for electric vehicles in China.

Citi lifted its 2021 sales estimate for electric vehicles in the country to an estimated 2.52 million units from 1.79 million units. For 2025, the firm also boosted sales estimates to 7.84 million units from 6.86 million units.

Citi said it expects that the uptick in the second quarter order backlogs will increase Nio’s revenue and market share in the second half of 2021.

Citi’s new price target of $58.30, raised from $57.60, represents a potential 50% upside from Friday’s closing price of $38.62. The bullish new target comes despite a rough year so far in 2021 for the electric vehicle maker, and the industry broadly, as supply chain and manufacturing constraints weigh on car makers’ delivery guidance.

“Based on the current production and delivery plan, the company will be able to accelerate the delivery in June to make up for the delays from May,” Nio said in a statement Tuesday. “The company maintains and reiterates the delivery guidance of 21,000 to 22,000 vehicles in the second quarter of 2021.”

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Biden’s infrastructure plan is a ‘green tidal wave’ that will revive the EV sector after its recent pullback, Wedbush says

president joe biden

President Biden’s infrastructure plan is set to be released on Wednesday afternoon and some analysts argue it will help revive the EV sector after its recent pullback.

Wedbush’s Dan Ives said in a note to clients on Wednesday morning that he expects a “green tidal wave” from the plan to boost EV stocks.

The analyst said around $200 billion or roughly 10% of President Biden’s plan could go towards electric vehicle initiatives “based on chatter out of the Beltway.”

That’s good news for EV stocks that have been battered recently by a rotation away from highly valued growth and tech names into more value-oriented plays.

Tesla stock is down some 28% from its January 26 highs, while EV names like Nikola and Lordstown Motors are down roughly 22% and 42%, respectively, over the past month alone.

In his Wednesday note, analyst Dan Ives said that “the Street” needs to see two specific components of the infrastructure bill pass through the House and get enacted in order to “change the game” for the EV sector in the US after the pullback.

First, Ives said he hopes to see an expansion of tax credits for EVs “to the $10k range or potentially higher in a tiered system.”

Second, the analyst said he expects to see Biden lift the 200,000 vehicles per manufacturer ceiling on EV credits which would restore the incredibly valuable tax credits for veteran manufacturers like Tesla and GM.

Ives also said that an expansion of charging stations around the US over the next decade would help support a “groundswell EV green tidal wave for consumers/trucking.”

The Wedbush analyst highlighted EV battery companies, recyclers, supercharging infrastructure firms, and commercial EV plays that are set to benefit from the infrastructure plan and EV boom as well.

Ives noted a considerable runway of growth for EVs in the US. EV sales represent just 2% of auto sales in the US compared to 4.5% in China and 3% globally.

According to Ives, the EV market represents a $5 trillion total addressable market over the next decade, which means “many EV OEMs/supply chain players are poised to be major winners over the coming years.”

One thing that wasn’t mentioned in the Wedbush note was that the infrastructure bill is set to be funded by tax hikes for corporations, which may hurt earnings.

Some reports say Biden’s upcoming tax plan could contain up to $3.5 trillion in tax hikes for wealthy individuals and corporations.

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