FYI: Analysts project Tesla’s Q3 2024 vehicle deliveries to reflect solid growth, with concerns about profitability due to price cuts.
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Tesla Projects Strong Q3 2024 Delivery Numbers Amid Profitability Concerns
Tesla Inc. is predicted to maintain its strong performance in vehicle deliveries for the third quarter of 2024, despite emerging profitability concerns due to aggressive pricing strategies. Industry analysts provide mixed forecasts but agree on an upward trend.
### Predicted Delivery Figures and Growth
Wolfe Research anticipates that Tesla will deliver approximately 460,000 vehicles in Q3 2024, closely aligning with the consensus estimate of 461,000 units. This estimation reflects a 4% growth compared to Q2 2024 and a 6% increase year-over-year. Despite this optimistic outlook, there are variances in geographical performance.
### Regional Insights
While Wolfe Research expects Tesla to maintain flat delivery figures in North America, the firm projects substantial growth in China. Tesla China is expected to achieve record-breaking deliveries of 172,000 units, which is anticipated to offset lower volumes experienced in Europe.
Conversely, Barclays holds a more bullish view, forecasting an 8% year-over-year increase in deliveries. The bank estimates that Tesla will exceed consensus expectations and deliver 470,000 units, suggesting robust market demand and operational efficiency.
### Profitability Concerns
Despite promising delivery projections, Wolfe Research has highlighted potential challenges concerning Tesla’s profitability. The company’s automotive gross margins, excluding regulatory credits, fell to 14.6% in Q2 2024, primarily due to aggressive price cuts on the Model Y that surpassed cost reductions. For Q3, additional incentives in the U.S. market are anticipated to introduce a pricing headwind of approximately $4,500 per vehicle.
According to Financial Modeling Prep, these incentives could reduce global revenue per vehicle by around $550, bringing the average price reduction to roughly $1,000 per unit.
### Year-to-Date Performance
So far, Tesla has delivered a total of 827,766 units in 2024. This includes 386,810 vehicles in Q1 and 443,956 in Q2. These figures exemplify the company’s consistent performance and its ability to achieve substantial quarterly deliverables.
### Conclusion
Tesla’s Q3 2024 outlook appears promising in terms of vehicle deliveries, driven largely by its performance in the Chinese market. However, profitability remains a key concern, primarily due to the company’s aggressive pricing strategies. Stakeholders will be closely monitoring Tesla’s ability to balance delivery growth with sustainable profitability.
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Written by William Kouch, Editor of Automotive.fyi.
