Analysts Share Bullish Outlook for Tesla’s Q3 Deliveries: Here’s Why

Shares of Tesla experienced a slight decline in premarket US trading on Wednesday, following a 1.7% increase in the previous session.

The uptick on Tuesday was driven by an optimistic forecast from analysts at Barclays regarding Tesla’s electric vehicle (EV) deliveries for the third quarter, which are set to be announced in early October.

In a report, the Barclays team projected that EV deliveries would rise by 8% compared to the same period last year, reaching approximately 470,000 units. This figure exceeds the company’s internal consensus estimate of 461,000 units.

Tesla recorded better-than-expected EV deliveries in the second quarter that significantly outpaced vehicle production, indicating improved demand and addressing concerns over excess inventory for its Model 3/Y. In the second quarter, Tesla delivered about 443,956 vehicles, surpassing Wall Street’s expectations of around 438,000.

The analysts noted, “Given the positive data points reported thus far in the quarter, particularly in China, we believe Tesla’s sales trajectory is well understood, and investors are anticipating a stronger result.”

They estimated that Tesla’s third-quarter deliveries in China, a critical market for global EV demand, likely reached around 179,000 units, potentially setting a new quarterly record. The analysts observed that Tesla’s performance in China, despite ongoing price competition with local rivals, has been “surprisingly robust.”

The team speculated that the strength seen in China is likely due to better macroeconomic conditions and EV demand, but it could also be influenced by incentives, pricing strategies, or renewed interest ahead of the planned 2025 launch of full self-driving technology.

The company has indicated plans to introduce full self-driving capabilities in China early next year, pending regulatory approval, which is a slight delay from earlier projections made by CEO Elon Musk to debut the technology by the end of this year.

Additionally, analysts at Piper Sandler have raised their expectations for Tesla’s third-quarter deliveries to 459,000 units, reflecting a 5.4% increase compared to the same period last year. They noted that the strength in China and solid Cybertruck deliveries in the US are likely to compensate for any weakness in Europe.

Piper Sandler projected total deliveries for the year to be around 1.75 million units, marking an increase of approximately 23,000 from their previous estimate. They cautioned, however, that while these delivery figures will significantly impact Tesla’s annual earnings, they may be overshadowed by the anticipated unveiling of Tesla’s much-anticipated robotaxi on October 10.