Tesla (NASDAQ: TSLA) bulls are giving their thoughts on what to expect during the Q2 Earnings Call later today, giving an indication that investors should look toward the rest of 2022 as the automaker battles to rebound from a “soft” Q2.
Tesla reported fewer deliveries in Q2 than it did in Q1, the first time in nine quarters the electric automaker failed to report quarter-over-quarter growth. However, demand for Tesla vehicles is through the roof, and it was not a lack of want from consumers or supply chain bottlenecks that caused the drop in delivery figures. A shutdown of Tesla’s Shanghai facility in China did.
The three-week shutdown ultimately culminated in a drop in vehicle deliveries for Tesla, but there is not much to fret about, according to several analysts who are bullish on the company.
Dan Ives of Wedbush says investors should look to 2H 2022 as The Street has. “With deliveries soft this quarter due to the China shutdown, Tesla’s ability to preserve margins this quarter will be front and center for investors while all focus now shifts to the outlook for the rest of the year,” Ives said.
Top 10 questions Tesla (TSLA) investors want to know from the Q2 2022 earnings call
Delivery projections for 2022 for Tesla have dropped considerably due to Shanghai’s shutdown and the subsequent rework of ramping to production volume once again. Ives broke down some estimates, with the lower end of the consensus projections leaning toward 1.4 million units for the year. This would ultimately align with Tesla’s desire to increase deliveries by 50 percent this year compared to 2021. However, the automaker was trending toward a “stretch goal” of 1.7 million deliveries this year, Ives said. “China issues coupled with global supply chain issues” are expected to continue to affect Tesla, but not at a rate that should alarm investors.
Meanwhile, Gary Black kept relatively the same narrative as he expects Tesla to fully rebound in 2H. “In my opinion, investors will look through 2Q $TSLA results and focus on stronger 2H,” Black said. He said he would like more indications on where Tesla could end up with deliveries this year, wondering if 1.5 million is what the automaker will shoot for.
Finally, Gene Munster of Loup Ventures recognizes Tesla’s demand advantage is stiff-armed by a supply shortage. “They have outsized demand for their products,” Munster said on CNBC yesterday. Tesla continues to ramp its new factories in Germany and Austin, Texas, to combat these supply issues. The two factories should easily add 1 million units of production to Tesla’s annual projections in a year after they are fully ramped, barring any major parts shortages or supply chain issues.
Disclosure: Joey Klender is a TSLA Shareholder.
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