Tesla shares were higher Monday ahead of the clean-energy carmaker's third quarter earnings later this week, with Wedbush analysts Dan Ives expecting an across the board beat after record deliveries and surging China sales.
Tesla, which moved more than 241,000 cars over the September quarter a record high powered by robust demand in China, is expected to post profits of $1.54 U.S. per share, on revenues of $13.7 billion, when it reports after the close of trading on Wednesday.
Ives says Tesla could have a delivery total of around 900,000 units in 2021, a tally that will rise to as high as 1.4 million in 2022, even in the face of a global shortage of semiconductors which is hamstringing traditional OEMs such as Ford Motor Co. F General Motors GM and Toyota TM. He carries an outperform rating with a $1,000 price target on the stock.
With the Chip shortage a major overhang on the world auto space and logistical issues, these delivery numbers combined with my this week's likely earnings beat speaks to an EV demand trajectory which looks quite robust for Tesla heading into 4 Q and 2022, Ives noted. The skeptics will remain, but Tesla is driving the charge for Tesla as only 3 per cent of automotive sales are EV globally and our prediction is to hit 10 per cent by 2025. The shares of Tesla and Nasdaq Composite were marked two per cent higher in early Monday trading, against a 0.36 per cent dip to the NASDAQ stock market to change hands at $860.20 each, the highest since February 8.
Recent data from China s Passenger Car Association showed Tesla sold 56,006 of its China-made vehicles in the world's biggest car market last month, a 27 per cent increase from August and a tally adding the final piece of information to its record third quarter deliveries, which was 73.2 per cent above last year to 241,300.
We believe China demand rebounded in the quarter and it is clear indicator of the increase in EV demand taking place globally with China leading the way, Ives said. While there are many competitors in the EV space, Tesla continues to dominate market share as evidenced again this quarter while battling through the chip shortage and is now seeing rebounding China demand after facing headwinds earlier in the year. Tesla acknowledged supply chain and logistics challenges in its first quarter delivery statement and thanked customers for their patience over the quarter, while Musk admitted the carmaker was operating under extreme supply chain constraints regarding certain standard automotive chips The group told investors in July that it could impact production rates over the second half of the year.