Tesla Deliveries Due After Shanghai Production Woes; Tesla Stock Hits Resistance

Tesla (TSLA) is likely to announce global production and delivery data for the second quarter later this week, after the Covid lockdowns and restrictions significantly reduced Shanghai plant production for much of the quarter. CEO Elon Musk has also cited supply-chain woes for limiting output elsewhere.

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Wall Street has revised down estimates throughout the quarter. Analysts polled by FactSet on average expect Tesla to deliver 273,000 vehicles in Q2, with forecasts ranging from 249,000 to 323,000.

Higher deliveries than Q1’s record 310,048 seems highly implausible given Tesla’s unusual challenges, suggesting that some analysts simply haven’t updated their forecasts. An online forecaster with an excellent track record estimated on June 17 that Tesla would deliver 251,000.

The EV maker opened its Austin, Texas, factory in April, right after launching production at its Berlin plant in late March. Tesla had expected a slow ramp-up in production, with the Berlin facility in particular not entirely finished. But even so, output has been light.

CEO Elon Musk recently said in a recently released video interview with Tesla Owners of Silicon Valley on May 31 that the two new factories were losing billions of dollars due to battery shortages and supply disruptions from China.

Musk also said that Tesla has struggled to ramp up production in Austin of Model Y SUVs that use its new 4680 cells and structurally integrated battery pack. It has instead had to pivot to using older 2170 cells to keep pushing out cars.

Shanghai Factory Reboot Planned

Tesla reported plans for new Shanghai production shutdowns in July, but these would be planned upgrades. The aim is to substantially increase production capacity to 22,000 vehicles per week.

The Shanghai factory has been producing 17,000 Model 3 and Model Y vehicles each week since mid June, Reuters reported.

“Our constraints are much more in raw materials and being able to scale up production,” Musk said at the Qatar Economic Forum organized by Bloomberg last week.

Various reports say Tesla Shanghai will either shut down entirely for two weeks or will shut down the Model Y and Model 3 production lines in turn.

Tesla customers are waiting longer to get their vehicles. Made-in-Germany Model Ys were expected to deliver at the end of June, but Tesla’s German website now says to expect delivery between October and December.

Low Berlin plant output and limited Shanghai exports to Europe exacerbated wait times.

For buyers in China, the wait time for made-in-China cars is between 10 and 24 weeks, according to Reuters.

In the U.S., Model 3 estimated delivery times range from September to December. Model S deliveries are expected between November 2022 and February 2023. Meanwhile, Model X and Y vehicles won’t be available until well into 2023.

Tesla Stock

Tesla stock fell 0.3% to 734.76 on the stock market today, reversing lower after hitting resistance at the 10-week line intraday.

Shares are in a long consolidation with a $1,208.10 buy point, according to MarketSmith chart analysis. TSLA stock is trading below its slumping 50-day line and is 41% below its 52-week high of 1,243.49.

Its relative strength line has declined over the last several months and has been trending sideways in recent days. Tesla’s RS Rating is 49 out of a best-possible 99. Its EPS Rating is 80.

EV Giant Breaks Out As It Seizes Tesla’s Crown

Other EV Stocks

Among other U.S.-based EV makers, Rivian (RIVN) dropped 3.6%, while Lucid (LCID) lost 4.3%.  Among American automakers making big investments in EVs, General Motors (GM) fell 0.6% while Ford (F) was up a fraction.

U.S.-listed shares of German automaker Volkswagen (VWAGY) added 0.6%.

Tesla’s China-based rival BYD (BYDDF) gained 1.9%, breaking out of a cup-with-handle base. Nio (NIO) sank 4.7%, Li Auto (LI) was down 4.1% and Xpeng (XPEV) fell 2.5%.

All four China EV makers are expected to report Q2 delivery numbers in the coming days as well.

MarketWatch reported that Mizuho analyst Vijay Rakesh cut price targets for Tesla, Nio and Rivian, citing lingering effects of supply constraints and Covid-related shutdowns in China.

Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.

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