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Tesla China’s average April not something to ‘get hung up on’: Piper Sandler

(Credit: Tesla China)

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Tesla China’s average sales figures in April are not something to “get hung up on,” according to the analysts at Wall Street firm Piper Sandler.

Tesla’s performance in sales in April in China wasn’t typical for the electric automaker, as figures from the Chinese Passenger Car Association showed that Tesla had successfully sold 25,845 units during the fourth month of the year. This included 14,174 exports that were shipped off to other regions, including Europe, where Tesla has been delivering cars from Giga Shanghai since the beginning of 2021.

However, these numbers are conflicting, and there seems to be some confusion within many analysts and those who track vehicle registration statistics. Initially, it was reported as a massive month for Tesla in China, with the over 14,000 exported vehicles not being included in the 25,845 units sold domestically to the Chinese market. This would make Tesla’s April in China a huge deal: 40,019 cars produced and delivered from Giga Shanghai.

Piper Sandler mentions in their note that the confusion between the conflicting reports is causing plenty of interaction with clients who are invested in Tesla stock. “We’ve been exchanging emails with confused clients all morning, following the overnight release of Tesla’s monthly sales figures in China,” Sandler analysts wrote. “Our original interpretation: 25,845 units were sold in China, but this may be incorrect. The wording online is vague/contradictory (exports have not historically been disclosed), and it’s possible that a TOTAL of 25,845 units were sold, only 11,671 of which were in China.”

Sandler analysts are looking at both scenarios with the possibility that either is realistic. A -66% month over month decline from March to April seems like it’s hard to believe, but reports from China indicate that Tesla’s Model Y production line was impacted for at least two weeks in April. This would contribute to the idea of a massive monthly dropoff in sales simply because Tesla didn’t have the capability to deliver that many units.

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Telsa sold 10,000 Model Y units in China in March, the Sandler note says. The analysts indicate that they believe April’s figures would have been higher as Tesla continues to ramp production volume at the Chinese plant. If Tesla shut down the Model Y lines for two weeks, there would have been a drop in sales of between 5,000 and 7,000 units, the analysts predict.

Still, the analysts at Piper Sander, which includes Alex Potter and Winnie Dong, don’t believe that the lackluster performance in April is anything to be concerned about. “Don’t stare too closely at these monthly numbers because it’s easy to get tied up in knots. We prefer to examine Tesla’s market share on a trailing 3-month basis, and we try to avoid extrapolating based on the most recent month of data. This is the case regardless of whether the latest results were good (supporting our thesis) or bad (contradicting our thesis).”

The market share argument is much more convenient for examining Tesla’s long-term success in the Chinese market. Through March 2021, Tesla had the second and fifth-most popular vehicles in China. The Model 3 is second, with 52,859 units registered in 2021, accounting for 11% of the total EV market share in China. The Model Y was in fifth, with 16,422 units accounting for 3% of the market share. Tesla’s either 25,845 units or 40,019 units, depending on how you choose to look at it until the CPCA gives clarification, only contributes to the company’s strong sales performance in China.

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According to the EV Sales Blog, these figures contribute to Tesla’s industry-leading performance as the most popular OEM in the EV sector, with a commanding lead over SAIC through Q1.

Disclosure: Joey Klender is a TSLA Shareholder.

Joey has been a journalist covering electric mobility at TESLARATI since August 2019. In his spare time, Joey is playing golf, watching MMA, or cheering on any of his favorite sports teams, including the Baltimore Ravens and Orioles, Miami Heat, Washington Capitals, and Penn State Nittany Lions. You can get in touch with joey at joey@teslarati.com. He is also on X @KlenderJoey. If you're looking for great Tesla accessories, check out shop.teslarati.com

Elon Musk

Tesla CEO Elon Musk’s $1 trillion pay package hits first adversity from proxy firm

ISS said the size of the pay package will enable Musk to have access to “extraordinarily high pay opportunities over the next ten years,” and it will have an impact on future packages because it will “reduce the board’s ability to meaningfully adjust future pay levels.”

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tesla elon musk

Tesla CEO Elon Musk’s $1 trillion pay package, which was proposed by the company last month, has hit its first bit of adversity from proxy advisory firm Institutional Shareholder Services (ISS).

Musk has called the firm “ISIS,” a play on its name relating it to the terrorist organization, in the past.

The pay package aims to lock in Musk to the CEO role at Tesla for the next decade, as it will only be paid in full if he is able to unlock each tranche based on company growth, which will reward shareholders.

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However, the sum is incredibly large and would give Musk the ability to become the first trillionaire in history, based on his holdings. This is precisely why ISS is advising shareholders to vote against the pay plan.

The group said that Musk’s pay package will lock him in, which is the goal of the Board, and it is especially important to do this because of his “track record and vision.”

However, it also said the size of the pay package will enable Musk to have access to “extraordinarily high pay opportunities over the next ten years,” and it will have an impact on future packages because it will “reduce the board’s ability to meaningfully adjust future pay levels.”

The release from ISS called the size of Musk’s pay package “astronomical” and said its design could continue to pay the CEO massive amounts of money for even partially achieving the goals. This could end up in potential dilution for existing investors.

If Musk were to reach all of the tranches, Tesla’s market cap could reach up to $8.5 trillion, which would make it the most valuable company in the world.

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Tesla has made its own attempts to woo shareholders into voting for the pay package, which it feels is crucial not only for retaining Musk but also for continuing to create value for shareholders.

Tesla launched an ad for Elon Musk’s pay package on Paramount+

Musk has also said he would like to have more ownership control of Tesla, so he would not have as much of an issue with who he calls “activist shareholders.”

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Investor's Corner

Barclays lifts Tesla price target ahead of Q3 earnings amid AI momentum

Analyst Dan Levy adjusted his price target for TSLA stock from $275 to $350, while maintaining an “Equal Weight” rating for the EV maker.

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Credit: Tesla China

Barclays has raised its price target for Tesla stock (NASDAQ: TSLA), with the firm’s analysts stating that the electric vehicle maker is approaching its Q3 earnings with two contrasting “stories.” 

Analyst Dan Levy adjusted his price target for TSLA stock from $275 to $350, while maintaining an “Equal Weight” rating for the EV maker.

Tesla’s AI and autonomy narrative

Levy told investors that Tesla’s “accelerating autonomous and AI narrative,” amplified by CEO Elon Musk’s proposed compensation package, is energizing market sentiment. The analyst stated that expectations for a Q3 earnings-per-share beat are supported by improved vehicle delivery volumes and stronger-than-expected gross margins, as noted in a TipRanks report.

Tesla has been increasingly positioning itself as an AI-driven company, with Elon Musk frequently emphasizing the long-term potential of its Full Self-Driving (FSD) software and products like Optimus, both of which are heavily driven by AI. The company’s AI focus has also drawn the support of key companies like Nvidia, one of the world’s largest companies today.

Still cautious on TSLA

Despite bullish AI sentiments, Barclays maintained its caution on Tesla’s underlying business metrics. Levy described the firm’s stance as “leaning neutral to slightly negative” heading into the Q3 earnings call, citing concerns about near-term fundamentals of the electric vehicle maker.

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Barclays is not the only firm that has expressed its concerns about TSLA stock recently. As per previous reports, BNP Paribas Exane also shared an “Underperform” rating on the company due to its two biggest products, the Robotaxi and Optimus, still generating “zero sales today, yet inform ~75% of our ~$1.02 trillion price target.” BNP Paribas, however, also estimated that Tesla will have an estimated 525,000 active Robotaxis by 2030, 17 million cumulative Optimus robot deliveries by 2040, and more than 11 million FSD subscriptions by 2030.

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Investor's Corner

BNP Paribas Exane initiates Tesla coverage with “Underperform” rating

The firm’s projections for Tesla still include an estimated 525,000 active Robotaxis by 2030.

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Credit: Tesla China

Tesla (NASDAQ: TSLA) has received a bearish call from BNP Paribas Exane, which initiated coverage on the stock with an Underperform rating and a $307 price target, about 30% below current levels. 

The firm’s analysts argued that Tesla’s valuation is driven heavily by artificial intelligence ventures such as the Robotaxi and Optimus, which are both still not producing any sales today.

Tesla’s valuation

In its note, BNP Paribas Exane stated that Tesla’s two AI-led programs, the Robotaxi and Optimus robots, generate “zero sales today, yet inform ~75% of our ~$1.02 trillion price target.” The research firm’s model projected a maximum bull-case valuation of $2.7 trillion through 2040, but after discounting milestone probabilities, its base-case valuation remained at $1.02 trillion.

The analysts described their outlook as optimistic toward Tesla’s AI ventures but cautioned that the stock’s “unfavorable risk/reward is clear,” adding that consensus earnings expectations for 2026 remain too high. Tesla’s market cap currently stands around $1.44 trillion with a trailing twelve-month revenue of $92.7 billion, which BNP Paribas argued does not justify Tesla’s P/E ratio of 258.59, as noted in an Investing.com report.

Tesla and its peers

BNP Paribas Exane’s report also included a comparative study of the “Magnificent Seven,” finding Tesla’s current market valuation as rather aggressive. “Our unique comparative analysis of the ‘Mag 7’ reveals the extreme nature of TSLA’s valuation, as the market implicitly says TSLA’s 2035 earnings (~55% of which will be driven by Robotaxi & Optimus, w/ zero sales now) have the same level of risk & value-appropriation as the ‘Mag 6’s’ 2026 earnings,” the firm noted.

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The firm’s projections for Tesla include an estimated 525,000 active Robotaxis by 2030, 17 million cumulative Optimus robot deliveries by 2040 priced above $20,000 each, and more than 11 million Full Self-Driving subscriptions by 2030. Interestingly enough, these seem to be rather optimistic projections for one of the electric vehicle maker’s more bearish estimates today.

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