Tesla wildcards: Q3 deliveries report, margin pressures, and moonshot robotaxi event reveals

Tesla (NASDAQ:TSLA) is only a few weeks away from issuing its Q3 deliveries report, which will land on the lap of investors before the company’s robotaxi event on October 10 and the release of the full Q3 earnings report later in the month. For perspective, Tesla (TSLA) delivered 444K vehicles in Q2 and 435K vehicles in Q3 a year ago. At last check, the consensus estimate of analysts was for Tesla (TSLA) to deliver 461K vehicles in Q3. The expected breakdown of Tesla (TSLA) deliveries is 18.1K Model S/X vehicles, 430.4K Model 3/Y vehicles, and 12.8K Cybertrucks. Looking further down the road, the consensus estimate is for Tesla (TSLA) to deliver 494K vehicles in Q4.

As always, the report could also provide insights into global demand for Tesla vehicles, especially in key markets like China. In a positive sign, Tesla (TSLA) sales of China-made vehicles jumped in August, up 17% vs. July and 3% vs. a year earlier, according to data from the China Passenger Car Association. Separate data showed that the automaker sold more than 63,000 cars (+37% M/M) in China last month, logging its best month so far this year, although sales were down from 64,694 units shipped in August 2023. In Europe, Tesla’s (TSLA) sales have stalled. During August, Tesla (TSLA) is estimated to have seen a 16% year-over-year decline in August, led by weak monthly tallies in Germany, France, and Italy. In the U.S., Tesla (TSLA) is still seeing strong sales, although its EV market share has slipped below 50%.

Tesla’s (TSLA) automotive gross margins have shown a general downward trend over the past 12 quarters due to factors such as increased competition in the electric vehicle market, price cuts implemented by Tesla (TSLA) to maintain demand, higher spending on AI projects and new technologies, and the overall economic conditions affecting the automotive industry and supply chain. Morgan Stanley analyst Adam Jonas said his firm is holding their breath for a turnaround in global EV margins, but thinks it is important for Tesla (TSLA) to continue to demonstrate cost control in the business for investors to begin to appreciate the expanding ‘surface area’ between its business model and the AI theme. Looking to the robotaxi event in Hollywood, Morgan Stanley is bullish on the very long-term potential for autonomous vehicles to transform surface transport networks, but is urging clients to keep expectations well managed for the near term. Tesla has sent out invitations to the October 10th event, which will be held in Warner Brothers studios. As for the event reveals, MS says investors can expect to see a demonstration of the latest iteration of FSD and a demonstration of a fully autonomous “cyber-cab” in a closed/semi-closed course since Tesla (TSLA) does not yet have a permit in California for autonomous vehicle testing without a driver. As far as moonshots, Jonas teased that Tesla (TLSA) could introduce an electric plane concept, electric boat vision, or a demonstration of an Optimus robot flipping burgers at a Tesla Diner.

Shares of Tesla (TSLA) fell 8.45% on Friday to reverse some gains piled up earlier in the week.