Yahoo Finance’s Myles Udland, Brian Sozzi, and Julie Hyman break down the latest delivery numbers for Tesla in China.
Video Transcript
MYLES UDLAND: So we talked at the top of the show about the stocks of today. But really, the meme stuck to rule them all is Tesla. That stock up a little bit in premarket trade this morning, up about 3% in fact. And that’s coming after we continue to get, Julie, what to me seems like conflicting news on Tesla’s sales trajectory in China. Last week we had a story out of The Information that orders had been cut in half, and now news today that deliveries surged some 29% last month.
JULIE HYMAN: Yeah, it is confusing, isn’t it? Deliveries just over 33,000, almost 33,500– some of those were exported, by the way. About 11,000 of those cars were exported, many of them to Europe. So they’re making cars in China that they are exporting elsewhere. But the rest of them were sold in China. So indeed, it is confusing that we’re getting these conflicting reports. I think there was some other reporting as well besides The Information that they saw a decline in deliveries.
And Tesla’s business in China is important, right? It’s a big market for them. They are only the third-largest electric vehicle maker, by the way, in China, behind the GM-SAIC joint venture and behind BYD. So they’re number three behind those.
But there have been some public relations issues for Tesla. There was a crash involving a Tesla. And there are crash involving cars all the time, but they got a lot of attention in China in particular. There’s been some regulatory scrutiny there of Tesla as well. So will that show in the official June numbers? Will there be more of this conflicting reporting? That, of course, is unclear. But it’s really interesting, because it is such an important market for them, to see what exactly is going on there and try and get some more clarity around their situation in China.
BRIAN SOZZI: Yeah, guys, you’re seeing the stock pop about 3% in the premarket here. And I’m just looking over a pretty good note from Wedbush’s Dan Ives. He covers Tesla very closely. And in decoding why you’re seeing the stock move here, Tesla sold 21,936 vehicles in China in the month. Whisper estimates were about 20,000.
Also too, Julie, playing off your point, again, Tesla has been dealing with a lot of PR issues. So the fact they were able to put up almost 22,000 domestic sales in the country is very important. And then secondarily, look, Tesla’s stock has been down about 10% over the past month. So the market was expecting a worst number here. And I think that’s why you’re seeing some of the clawback in the stock in the premarket.
Now ultimately, Myles, this puts the heat on Tesla to keep this momentum going in June. I think the new benchmark here for Tesla will be, at least for the bulls, can they serve up 300,000 deliveries in June? That’s the next– that’s probably the next big number here.
MYLES UDLAND: You know, it’s interesting, in a way, with Tesla. Whenever it gets back to these fundamental type quarters, the story gets more boring. And I think in general, all else equal, that’s probably good for Tesla. Things have been very interesting with that business and that company, and of course their CEO, for a long time.
And I think the more that we can talk about the delivery trajectory for Tesla, the more that long-term bulls are happy with the story, because then the story is about their position in the auto market and not about whatever Elon is doing in his free time. And I think if my counter is right, this is the second day in a row we haven’t discussed any Elon tweets. But we might have discussed some yesterday. Who could really say?
JULIE HYMAN: Well, yesterday he tweeted about the Plaid– Plaid Pl– what is it called, the Plaid Plus?
MYLES UDLAND: The Plaid Plus. Does that– does that count as an Elon tw– so if he tweeted a thing that’s fundamental to Telsa’s business, does it count as like–
JULIE HYMAN: It doesn’t count.
MYLES UDLAND: It doesn’t count.
JULIE HYMAN: I’m with you. Yeah, no. That’s an actual, like, fundamental announcement related to the company that he just happened to make on Twitter.
MYLES UDLAND: All right, so we’ll count it as two days without having discussed Elon Musk’s Twitter feed. We’ll see if we can make it three in a row tomorrow.