Tesla blows past Q2 delivery forecasts, but the stock is falling

00:00 Pras Subramanian

480,000 versus 398,000 was the sort of the the Bloomberg consensus. like I think a lot of it has to do with the new Model Y, right? So last year at this time, it was still like ramping up in the in the factories. It wasn’t fully fully there yet. So the production numbers were lower and we saw a lot of Tesla sales across the globe kind of come down because that new Model Y wasn’t available.

00:21 Pras Subramanian

We also had the Elon Musk factor. At that point, he was still remember he was still part of the government, part of the DOJ, very unpopular there here in this country and abroad. So that was still kind of in the mix there. Uh, a year later, things have probably cooled off a bit and and and you’re seeing that now in the numbers.

00:40 Jared Blikre

Well, can we I have any kind of line of sight into regionally, what was strong, what was relatively weak, Europe, China, US?

00:52 Pras Subramanian

So we Tesla doesn’t break it out geographically, but we have some data from uh like auto bodies in Europe and China where they saw registration data was quite strong. In particular Europe, I want to note here. Um, Tesla alone uh was up 108% in the month of May, uh to 28,000 sales and then the first half of the year up 60% to 120,000 units. So some big numbers there and we also saw that Giga Berlin up their capacity. They’re actually building more. So that’s sort of uh indicative of the fact that there’s more demand there and they’re and they’re ramping up supply to meet that demand.

01:31 Jared Blikre

So it was it was good news, generally. So why is the stock down today?

01:35 Pras Subramanian

Yeah, I think it’s more, you know, I I was looking at it, I thought it was more of a like a sell the news event. I think uh uh Jean Munster at Deep Water Research was talking about that, how this was that’s what that was and perhaps the whisper number that was out there was much higher than than expected. I I had, you know, we saw a lot of Wall Street banks were looking at 420, 430. Uh but but for some reason the consensus was much lower. Uh and also there’s Muster mentioned the gas price fact that maybe there’s people discounting this number because they think that people bought a lot of EVs in this country maybe or elsewhere because gas was so expensive and that led to this maybe a a temporary bump in Q2 for for Tesla.

02:18 Jared Blikre

Uh, you mentioned this, but just come back on it. A year ago, uh, it was all about Musk and they can’t stand the guy and he’s polarizing and he’s wrecked the brand. I mean, does a number like this, does it tell you, okay, that’s yesterday’s news, maybe it was overblown to begin with? What do you think about that?

02:42 Pras Subramanian

I think there’s a good mix of a lot of all those things in in there. I mean we had some data when I wrote about this, but I had to I interviewed a PR crisis expert on this and what he would what advice he would give Musk because there was data out there that showed that people were actually saying I’m not going to buy this car because of him. At the time it was the peak of his involvement with the government, right? So now I think it’s a bit, you could say it’s a bit overblown perhaps. Uh, you know, Jackie and Gray writer from your Times did a did a did a big piece where they interviewed a lot of people in Europe.

03:13 Pras Subramanian

And for the most part what they were saying was, we still don’t like Musk, but the thing is the car is so cheap here compared to other peers and the technology is so good. So they’re basically holding their nose while they buy. So there still is a negative Musk factor here. like he’s he’s always out there kind of spouting off on things. Um and so people are are are are upset about that, but but if push comes to shove and prices are good and the technology is still good. I think I’m still seeing that effect here in the states. people say, I don’t know if I want to buy a Tesla.

03:41 Pras Subramanian

And I say to them, look, Musk is one thing, but the product which I’ve tested is is amazing in terms of the app connectivity. No other company does it better.