Tesla Stock Higher as Investors Look Beyond July’s China Sales Slump

You’re here (TSLA) – Get the report from Tesla Inc. Shares edged higher on Tuesday following data from China indicating a sharp drop in sales and exports in July amid planned maintenance outages at its Shanghai gigafactory.

Tesla sold 28,217 Chinese-made cars last month, the China Passenger Car Association (CPCA) said on Tuesday, of which about 19,756 units were exported to other markets.

The figures represent a sharp drop from the 78,000 units sold in June, although the drop is linked to production suspensions in Shanghai which kept the factory idle for much of the month as it retools various systems to allow a weekly expansion of the unit over the coming months.

Tesla CEO Elon Musk told investors at the group’s annual general meeting last week that he expects to reach a production rate of around 2 million vehicles a year by December, and hinted at the construction of a new gigafactory to complement existing facilities in Shanghai, Berlin, Austin and Freemont.

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Late last month, Tesla reported stronger-than-expected second-quarter results and reiterated its full-year shipment growth target despite input price pressures and shrinking profit margins. .

Tesla said adjusted profit for the three months ending June rose 56.5% from a year ago to $2.27 per share, although revenue was modestly light at 16.94. billions of dollars.

Automotive gross margins were 27.9%, Tesla said, down 500 basis points from a year ago, Tesla said, just inside Street’s forecast of 28.2 %, due to an increase in input costs and expenses related to the ramp-up of new plants. in Austin and Berlin.

The group also said it expects full-year deliveries to rise 50% from 2021 levels, implying a target of 1.4 million vehicles which, according to Tesla’s chief financial officer , Zachary Kirkhorn, became “more difficult but still possible with solid execution”.

Tesla shares rose 1.23% in premarket trading to point to an opening price of $882.00 each, a move that would push the stock to a 40% gain from its lows of at the end of May. .