Tesla Stock Price Analysis

Tesla is set to report its Q2 earnings on July 17th, but before that investors are waiting on news of its Q2 deliveries this week.

Tesla stock is down about 15.5% year-to-date, underperforming the S&P 500’s (SPX) over 14% gain. Also second-quarter delivery numbers are expected to be lower than analysts' initial predictions, reflecting a slowdown in EV demand this year. However, the focus for some investors might be shifting towards Tesla's energy storage business, which is showing strong growth potential.

Key Points

• Tesla's deliveries are not growing as fast as they used to.
• Even though Tesla has reduced prices, it's not leading to a significant increase in the number of cars sold.
• Tesla's profit margins on car sales are expected to decrease because of price cuts and lower sales volume.
• Lower delivery expectations for Tesla in 2024 compared to 2023 (1.55 million vs 1.85 million).
• There is a weakness in all of Tesla's major markets. Tesla is facing tougher competition in China, a key market for the company.
  
  

Tesla Delivery Decrease Expected

• Analysts now predict Tesla delivered around 436,000 vehicles globally in Q2, down from a consensus of 448,000 at the end of May.
• This would represent a 6.5% decrease compared to last year but a 13% increase from Q1.
• Some analysts believe the number could be even lower, potentially falling below 415,000.
  
  

Tesla's Energy Storage Deployment

Investors are increasingly interested in Tesla's energy storage deployment figures alongside deliveries. The company achieved a record high of 4,053 megawatt-hours (MWh) deployed in Q1. Tesla's energy business, which includes solar products and battery storage solutions, is projected to grow significantly. Analyst Adam Jonas expects Tesla Energy revenue to surge 20% this year and surpass auto margins by 2024.

Tesla's Focus Shifts to Robotaxi

Tesla has indeed shifted its focus towards developing robotaxis, a move announced in April 2024. This strategic change comes with significant implications for the future of the company and the transportation industry as a whole.

• Tesla is prioritizing autonomous vehicle technology and plans to launch a robotaxi service. This marks a shift from the previous goal of delivering large volumes of electric vehicles (EVs) to consumers.
• Robotaxi is expected to be revealed on August 8th 2024. This event will likely provide more details about Tesla's autonomous driving tech and its plans for the robotaxi network.
• This shift in focus has reportedly led Tesla to abandon its plans for a more affordable electric car, the Model 2. Resources are being directed towards the robotaxi project instead.

Nevertheless Tesla's Autopilot and Full Self-Driving technology haven't yet achieved true self-driving capabilities and have faced regulatory scrutiny.

Tesla Technical Analysis and Stock Performance

• Tesla stock gained 6% on Monday, reclaiming its 200-day moving average.
• The recent surge follows a breakout from a key buy point and an overall gain of more than 11% in June.
• With the shareholder meeting behind them, investors are now eyeing Tesla's Q2 earnings in July and the robotaxi reveal in August.

• Support Level - A zone between $181.94 and $185.44 is a strong support area because here we have a confluence of factors like trend line and 20MA and historically this is the area where the price bounced back (buyers take control over sellers).
• Resistance Level - $263.80 - This price level might act as resistance because it's a trend line on the weekly chart, indicating a selling pressure zone in the past.
  
  

Bottom Line

Tesla faces a complex situation. 
While its stock price has rebounded slightly, delivery numbers are expected to be lower than anticipated due to a slowdown in EV demand. Additionally, profit margins are likely to decrease due to price cuts and lower sales volume. However, there are some bright spots. Tesla's energy storage business is experiencing strong growth, and investors are increasingly interested in this segment. Additionally, Tesla's shift towards robotaxis with the upcoming Cybercab reveal signifies a potentially transformative future for the company. Overall, Tesla's near-term performance hinges on Q2 earnings and the reception of its robotaxi plans.