Tesla Earnings Beat But Musk Warns On Chips, Semi Delayed Again; Tesla Stock Rises

Tesla (TSLA) topped second-quarter forecasts late Monday, but CEO Elon Musk warned the chip shortage hitting the auto industry remains serious while the Semi model suffered another delay. Tesla stock rose.


Tesla Earnings

Earnings per share shot up 230% to $1.45, easily topping FactSet forecasts for 94 cents, as revenue nearly doubled to $11.96 billion, above estimates for $11.53 billion. Revenue from regulatory credits came in at $354 million, down 17% from a year ago and down 31.7% from Q1.

Tesla previously reported Q2 deliveries shot up 122% from a year ago to 201,250 vehicles. That should include the new Model S Plaid, which began deliveries last month after several delays.

In a statement Monday, the company said it expects Model S production will continue to increase throughout the rest of the year.

Tesla also said Monday the company is “producing at the limits of available parts supply. While we saw ongoing semiconductor supply challenges in Q2, we were able to further grow our production.” In Shanghai, Tesla had “minor interruptions due to supply chain challenges.”

But in a call with analysts later, Musk sounded gloomier, saying the “global chip shortage situation remains quite serious, hard to say how long this will last. It’s out of our control essentially. Seems like it’s getting better but it’s hard to predict.”

Musk also said the company plans “limited production” of new-design Model Y vehicles in Berlin and Austin, Texas, later this year.

The new Model Y takes priority over the upcoming Cybertruck. While the engineering and architecture for the electric pickup is now complete, management added, a production ramp-up in Austin would come after the Model Y’s.

That suggests the Cybertruck may not start coming off the assembly line until 2022, after Musk previously said it could happen late this year. Meanwhile, the company also said in Monday’s press release the Semi electric big-rig truck has been pushed to 2022.

Unlike in Q1, when Tesla recorded proceeds from sales of digital assets of $272 million, no such proceeds were booked in Q2. Tesla reported a Bitcoin-related impairment of $23 million.

Net digital assets were largely steady at $1.31 billion vs. $1.33 billion on the balance sheet at the end of Q1. Tesla bought $1.5 billion in Bitcoin in February.

Last week, Musk said Tesla may resume accepting Bitcoin as payment for EVs if Bitcoin’s use of renewable energy trended beyond 50%.

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Tesla Stock

Shares rallied 1% late after closing up 2.2% at 657.62 on the stock market today. Tesla stock has lost nearly 30% of its value from its all-time high of 900.40 in January but recently found support at the 40-week line on its weekly chart, and now it’s spending some time above its 10-week moving average, according to MarketSmith chart analysis.

Meanwhile, the Leaderboard stock’s relative strength line is trending downward. It has an RS Rating of 78 out of 99 and an EPS Rating of 74.

Among automakers with an expanding EV footprint, General Motors (GM) gained 1.5% on Monday, Ford (F) added 1.3%, and Volkswagen (VWAGY) rose 1.1%. China-based rivals Nio (NIO) fell 1.9%, Li Auto (LI) added 1.6% and Xpeng (XPEV) dipped 0.6%.

Chip, Battery Shortages

With Intel (INTC) reporting Thursday that the chip shortage is likely to last at least two more years, automakers including Tesla will be impacted for some time. But those shortages are also affecting other EV makers and auto production generally, giving Tesla pricing power.

Battery shortages are also an issue, as raw materials continue to be in short supply. As a result, on Thursday Tesla inked a supply deal with BHP (BHP) for nickel. Terms of the deal were not disclosed.

BHP will supply Tesla with nickel from its Nickel West asset in Western Australia. Earlier this year, EV maker Tesla confirmed that the company was seeking to buy around $1 billion per year in battery minerals from Australia alone.

Nickel is a key mineral in lithium-ion batteries, which is the linchpin of Tesla’s next-generation battery cell.

“With all of these headwinds, Tesla still impressively hit 200k+ deliveries in the June quarter and appear to be on a trajectory to possibly hit 900k for the year with a stronger 2H on the horizon in our opinion,” said Wedbush’s Daniel Ives in a July 21 note to clients.

Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.


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