On July 2, Tesla's stock price skyrocketed by 10.20%, and its total market value surged by 68.2 billion US dollars (about 490 billion yuan) with the interest-free car purchase promotion announced on Monday, accumulating a 17% increase in two days.

While Nvidia has been breaking new highs, Tesla has quietly recovered from its decline earlier this year and the release of important second-quarter operating data reveals that Tesla is not as unimpressive as previously expected. Since the Phase Low of April 22nd and continuing until now, its stock has risen by 62.8% in just over two months.

01

From the news point of view, Tesla's big jump on July 2 is related to its unexpectedly high delivery volume.

According to the latest announcement, in the second quarter of 2024, Tesla produced about 410,800 vehicles and delivered about 440,000 vehicles, but this exceeded market expectations of 439,300 vehicles.

Among them, the "main player" Model 3/Y produced and delivered 386,600 and 422,400 respectively, also exceeding market expectations. Other models delivered 21,600 vehicles, including Model S/X and Cybertruck.

According to data from the China Association of Automobile Manufacturers, Tesla's Shanghai super factory delivered 71,000 vehicles in June, and domestic sales continued to grow to 59,200 vehicles, a 7% increase month-on-month. In addition, Tesla's domestic sales in the second quarter of this year increased by 10.2% month-on-month.

In the first quarter, Tesla delivered only 386,800 cars, which made the market pessimistic about Tesla's current competitive prospects. The 30% decline in the first quarter showed this. Therefore, the premise of exceeding expectations may be that although second-quarter sales have fallen for two consecutive quarters, the market has reduced delivery expectations, and Tesla's delivery data has eased the market's concerns about weak demand for pure electric vehicles.

The reason why it can achieve better-than-expected delivery results is due to the stimulus measures such as price reductions, and from the current situation, Tesla is still "implicitly lowering prices". On Monday, Tesla China's new car finance policy showed that consumers who buy Model 3/Y Standard Range and Long Range All-Wheel Drive models can enjoy "5-year 0-interest" and other preferential activities, which may save consumers more than 20,000 yuan in interest.

Comparatively speaking, so far this year, Tesla and BYD are neck and neck in pure electric vehicle deliveries.

Chinese electric vehicle manufacturers have performed well in the second quarter. Whether in June or in the first half of this year, the proportion of pure electric vehicles in BYD's production and sales volume exceeded 40%. It produced 141,030 and sold 145,179 in June, and produced 730,083 and sold 726,153 in the first half of the year, while Tesla's combined figures for the first and second quarters are around 730,000.

According to a report by Counterpoint Research on July 2:"BYD's share in the pure electric vehicle market is expected to increase significantly by 2024, when its battery electric vehicle sales will exceed Tesla's."

In April of this year, Tesla's first-quarter financial report for 2024 showed that Q1 Tesla's revenue fell by 9% year-on-year; net income fell by 55% year-on-year, and expected annual delivery volume fell, reducing market confidence in Tesla.

But then Musk adjusted his business layout in a piecemeal way, accelerating the promotion of FSD with a low price, and will soon launch Robotaxi in August, forming a robot taxi fleet similar to Uber, and Tesla owners will also have the opportunity to rent their own Tesla cars to provide car rental services.

The six consecutive trading days of rising prices have also left Musk unsatisfied. In response to X, Musk replied:"Once Tesla completely solves the problem of autonomous driving and mass-produces Optimus robots, anyone who still holds short positions will be wiped out, even Bill Gates."

02

In addition to the production and delivery data of electric vehicles, Tesla also announced in the announcement that the company deployed 9.4 GWh of energy storage products in the second quarter, the highest quarterly deployment so far, a year-on-year increase 157%. With Q1's 4.1GWh, the cumulative installed capacity in the first half of the year has reached 13.5GWh, close to last year's annual level.

Tesla's energy storage business includes two types of products: Powerwall and Megapack. Powerwall is a home energy storage system that can store the electricity generated by solar panels for use at night or during power outages. Megapack is a super large-scale commercial energy storage system suitable for large commercial and industrial customers such as data centers, hospitals, and schools.

The currently built and under-construction capacity includes the California Las Puro super energy storage factory and the Shanghai energy storage super factory, which just started construction in May. Among them, the increase in delivery volume in the second quarter mainly benefits from the capacity release of the American factory.

The Shanghai factory is expected to start production of Megapack as early as the first quarter of 2025, with two cell suppliers, Contemporary Amperex Technology and a subsidiary of BYD Company Limited called Fudi Battery.

Although not the most watched business of Tesla, the energy storage business gains value in the background of structural tension of power supply. The reason is that AI data centers, after construction and operation, are all huge energy consumers, which will bring huge loads to the US power grid.

According to research by Deutsche Bank, by 2030, the power consumption of US data centers may be equivalent to that of 150 million electric vehicles. From 2023 to 2027, the expected growth of US data center power is equivalent to adding 59 million electric vehicles on the US roads, an increase of 21% in the total number of vehicles in service. In the long run, Deutsche Bank estimates the value of Tesla's energy business at about $130 billion, and raises the target price to $310.

Overall, while Ford and the 'new force' Rivian have warned of weak demand for American electric cars and fierce competition in the Chinese market, Tesla still achieved better-than-expected delivery results in the second quarter.

The second quarter financial report will be released after the close on July 23 and worth paying attention to.