Tesla Vehicle Sales Jump 25%, Far Exceeding Estimates

A vehicle transport truck arrives with Tesla Model Y vehicles at the company's store in Colma, California. Photographer: David Paul Morris/Bloomberg Photo by David Paul Morris /Bloomberg

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(Bloomberg) — Tesla Inc.’s vehicles sales beat Wall Street’s modest expectations by a wide margin, gaining in a slower-growing global market for plug-in cars.

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The Elon Musk-led company delivered 480,126 vehicles worldwide in the second quarter, trouncing the average of analyst estimates compiled by Bloomberg for 396,466 vehicles.

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Deliveries jumped 25% from a year earlier, when a consumer backlash against Musk’s polarizing work for the Trump administration dragged on the brand. But while Tesla’s second quarter showing was a record, deliveries still fell short of China’s BYD Co., which retook the global lead with 557,090 fully electric car sales.

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“This was a much stronger than expected deliveries number, which we think was primarily driven by China and Europe,” Garrett Nelson, an equity analyst with CFRA Research, said of Tesla’s sales.

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While Tesla’s car sales are improving, many Musk watchers are looking past the company’s core EV business and toward the CEO’s vision of turning artificial intelligence, autonomy and robotics into major revenue generators in the future. They’re also increasingly anticipating Musk potentially opting to merge the company with SpaceX, which staged a record initial public offering last month.

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Tesla shares fell as much as 3.5% shortly after the start regular trading in New York, erasing early gains. The stock rose in four consecutive days of trading before the deliveries release, advancing more than 13% during that span.

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Maintaining a brisker pace of EV sales will be critical for Tesla as it takes a more spendthrift approach to capital expenditures. The company plans to shell out more than $25 billion this year, roughly three times last year’s outlay, with Musk investing in Optimus humanoid robots and autonomous Cybercabs, among other initiatives.

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Tesla’s energy business also snapped back after a slow start to the year. The company deployed 13.5 gigawatt hours of storage products last quarter, up 53% from the first three months of the year.

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Tesla now offers only three models to retail customers, with the popular Model Y sport utility vehicle and Model 3 sedan accounting for all but a sliver of sales. Demand for the Cybertruck has been disappointing, and deliveries would be even further off the mark without SpaceX, which has bought thousands of the pickups since late last year.

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Tesla stopped assembling Model S sedans and Model X SUVs in May, with Musk opting to convert space in the company’s Fremont, California, factory to produce Optimus robots.

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While Tesla expects to start scaling its Semi and Cybercab models this year, the truck is aimed at commercial customers and the latter is only just beginning to undergo testing on public roads.

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“The results were strong, but with Tesla the market is more so looking past vehicle deliveries and asking what comes next for AI, autonomy, and the broader growth story,” said Haris Khurshid, chief investment officer at Chicago-based Karobaar Capital LP. 

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—With assistance from Jordan Fitzgerald.

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(Updates with analyst’s comment in the fourth paragraph, energy storage deployments in eighth paragraph.)

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