Tesla Q3 Shipments Preview – Wolfe Research By Investing.com

Tesla ( NASDAQ: % higher than in T2.

The figure, hinted at in the company’s Q3 shipments preview note, is largely in line with the consensus estimate of 461,000.

The firm explains that the regional breakdown suggests flat deliveries in North America, with China set to deliver a record 172,000 vehicles, offsetting lower volumes in Europe.

While deliveries are expected to be steady, analysts highlight concerns about profitability.

In Q2, Tesla’s auto gross margins, excluding credits, fell to 14.6%, largely due to cost cuts that failed to offset lower Model Y prices. For Q3, Tesla stepped up incentives, particularly in the US, which could lead to a $4,500 per vehicle in downwind pricing.

Analysts estimate this could reduce overall unit revenue by $550 and total price cuts by $1,000 per vehicle.

Despite the price pressure, Tesla’s cost cuts are expected to continue. Since the end of 2022, the company has reduced its cost of goods sold (COGS) by approximately $800-$900 per vehicle per quarter.

Analysts project Tesla could see a modest improvement in gross margins, rising to 15.2% in Q3, with some help from lower Cybertruck losses and deferred revenue recognition.

Looking ahead, analysts said: “Meanwhile, TSLA will host its much-anticipated Robotaxi event on October 10. We continue to see
ahead of this event as a potential short-term positive catalyst for the stock.”

Analysts also expect the launch of Tesla’s lower-cost model in early 2025 to play a key role in easing future pricing pressures and filling production capacity.