Tesla released its delivery numbers for the second quarter on July 2, and the numbers were in line with analysts’ lowered expectations. Analyst targets were broadly lowered partially due to China’s COVID-19 lockdowns, which took a toll on production. On July 5, Bloomberg also reported that the company will halt most production on its Model Y assembly line in Shanghai for the first two weeks of July, adding that TeslaMag is reporting that Tesla’s plant near Berlin will take a two-week break starting July 11.

                By                    Yaёl Bizouati-Kennedy

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In the second quarter, Tesla produced 258,580 vehicles and delivered 254,695 vehicles “despite ongoing supply chain challenges and factory shutdowns beyond our control,” the electric vehicle (EV) company said in an investor relations release. The release detailed that June 2022 was the highest vehicle production month in Tesla’s history.

Goldman Sachs analysts were expecting 261,000 deliveries, according to a note, while CNBC reported that — according to a consensus compiled by FactSet-owned Street Account — analysts were expecting deliveries of 256,520 vehicles for the quarter.

In terms of what this means for Tesla’s demand story going forward, Ives said that based on global reservation orders and wait times, demand is still outstripping supply by 15%-20% for Tesla on the Model Y front.

“While the softer macro will clearly impact demand around the edges in the coming quarters, we believe Tesla has ample demand capacity to hit ~2 million units in 2023 globally with production capacity that can exceed this number when factoring in Austin and Berlin to a normalized China production target,” he said.

Tesla Spending Cash on Gigafactories

Earlier this month, Musk said that the two gigafactories opened earlier this year in Texas and Germany are “losing billions of dollars.”

Electrive reports that it is not yet clear what impact the renewed production stop in July will have on deliveries in the third quarter.

“Usually, Tesla exports the cars produced at Giga Shanghai in the first month of a quarter. This is so that the cars made that quarter can still be delivered in Europe by the end of that quarter, for example. After several weeks of shipping these cars can still arrive in the last month of the quarter,” according to Electrive.

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Shares of Tesla are down 43.1% year-to-date and were down 1.9% in pre-market trading on July 5.

Tesla will report its quarterly earnings on July 20.