Tesla analysts lower Q2 electric vehicle delivery estimates

Yahoo Finance’s Pras Subramanian joins the Live show to discuss outlooks for Tesla vehicle deliveries.

Video Transcript

- But all eyes are on market mover Tesla ahead of the EV maker's much anticipated delivery report. Shares are down about 10% in June alone.

Yahoo Finance Senior Auto Correspondent Pras Subramanian has more on this one. And Pras, throughout Wall Street, into this report, we have seen estimates come down across the board.

PRAS SUBRAMANIAN: A few weeks ago, around 304,000 was the estimate. And that's just coming down every day, seemingly, with the concern being China. Right?

So let's take a look at the numbers. Today, alone, we saw from Deutsche Bank. Analyst Emmanuel Rozner, known as a Tesla bull, kind of knocking his estimate down around 65,000 vehicles going to 245K from 310.

Again, he's talking about these prolonged COVID shutdowns in China and logistical challenges there. Also, Goldman. Right? So Mark Delaney there had cut his estimate down to 261K at the end of May. He said he might see in line at 250, is what his downside is right there.

And then finally, Wedbush, Dan Ives, of course, uber bull on Tesla. He's going to 250 from 277 because anything above 260K will be viewed positively by the street.

He's saying that, basically, June will be ugly and nothing to write home about. But he's looking through for second half, any kind of demand kind of story there, any kind of positivity there.

And just kind of shows you, Sozz, I'm a little surprised it took him this long going into this weekend when you might actually get those numbers coming out. We knew this story about a month ago. So it's just waiting for that deadline, that pressure.

- It's the 3 and the Y that really account for the majority of the production and deliveries right now for Tesla. But also on the other end of that, it's how many of those orders are actually opting up to a higher package or a higher tier.

Do we have any sense of that? And that particularly impacts the profit margins as well for a company like Tesla.

PRAS SUBRAMANIAN: Yeah, if you go in the website and try to order a 3 or a Y, you'll see a delivery date of December or next year. But if you add something like FSD, the Full Self Driving, cost 10,000, you'll come down a few months.

So they know they're going to optimize those orders that are for higher priced, higher tier Model 3s and Model Ys. Also, today, we saw an electric story about how Giga Texas actually is ramping up pretty fast, 5,000 deliveries per week now.

They don't know how long that can sustain, but they're trying to bridge the gap there with these Q2 numbers. Hopefully, maybe you might see a little surprise there. But it seems like you're going to see around 250K this quarter from 310 the quarter before.

- And this is all sort of in line with what we've been hearing from Elon Musk himself, that things are going to slow down, that he feels like we're going into recession, and that he's going to have to cut jobs.

Although, he's talking about mostly cutting jobs, interestingly, on the salary end, not on the hourly production end. So I wonder if that's going to have to give at some point too.

PRAS SUBRAMANIAN: Yeah, looking ahead to Q3 and Q4, are you going to see any kind of drop back because of the fact that they're cutting these jobs? And I've heard some jobs are delivery specialists and things like that, that actually do matter when it comes to fulfilling these orders.

So I think that is a concern. But when you starts seeing stuff like Giga Texas and Giga Berlin finally coming online, it might recoup some of those losses.

And you might see, I think Ive still thinks, we're going to still see a 50% CAGR on that growth rate, so 1.4 to 1.5 million this year. So maybe they can actually make it with a slimmed down Tesla.

- We'll have to see. I'm really curious about how those numbers are going to look, deliveries on, not Monday, Tuesday we'll be back here.

- Whenever Elon wants to report them.

- Yes. Well.

- They might actually release them on Sunday. So we'll see.

- Might not at all.

- The market won't be here to react. And we won't be here to react.

PRAS SUBRAMANIAN: We'll be here.

- Good.

- Yes.