Tesla Stock Rises 5% Despite 13.5% Drop in Q2 Deliveries

In the second quarter of 2025, Tesla delivered 384,122 vehicles, marking a 13.5% decrease from the previous quarter's 444,000 vehicles. Despite this significant drop, the company's stock price rose by 5%, closing at 315.65 dollars. This unexpected surge in stock price, despite the historic decline in delivery numbers, can be attributed to several factors.

Firstly, the delivery numbers, though down, were better than the market's most pessimistic expectations. Analysts had predicted a delivery figure of around 386,000 vehicles, and Tesla's actual delivery of 384,122 vehicles was only slightly below this estimate. This slight underperformance was seen as a positive sign, given the challenging market conditions and the company's recent struggles.

Secondly, investors had already factored in the possibility of disappointing sales figures. The company had faced a 37% year-over-year decline in sales in Europe during April and May, and a more than 10% decline in China during the same period. Additionally, the company's brand image had been affected by the CEO's political stance and trade tensions, which had led to a decrease in sales in certain regions.

Thirdly, the company's stock price had already been on a downward trend, falling for six consecutive trading days before the delivery numbers were announced. This downward trend had created a sense of pessimism among investors, and the delivery numbers, though disappointing, were not as bad as some had feared. This led to a relief rally, with investors buying back into the stock.

Fourthly, the company's management had already acknowledged the challenges facing the company and had taken steps to address them. The company had recently updated its popular Model Y vehicle, and investors were hopeful that this update would lead to an increase in sales in the coming months. Additionally, the company had announced plans to launch a new vehicle model later this year, which investors hoped would provide a further boost to sales.

Finally, the company's stock price had been volatile in recent months, with large swings in both directions. This volatility had created a sense of uncertainty among investors, and the delivery numbers, though disappointing, provided some clarity on the company's performance. This clarity led to a sense of relief among investors, and the stock price rose as a result.

In addition to the delivery of vehicles, Tesla also delivered 9.6 gigawatt hours of energy storage products in the second quarter, which was higher than the 9.4 gigawatt hours delivered in the second quarter of 2024, but lower than the 10.4 gigawatt hours delivered in the first quarter of 2025. This indicates that the company's energy storage business is continuing to grow, despite the challenges facing the company's vehicle business.

Investors are also eagerly awaiting the company's second-quarter financial report, scheduled to be released on July 23. Analysts currently expect earnings per share to be 44 cents, down from 52 cents in the second quarter of 2024. At the beginning of the year, analysts had estimated earnings per share to be around 85 cents for this quarter. The stable delivery performance suggests that adjustments to earnings per share estimates may not be significant.

Tesla produced 410,244 vehicles this quarter, leading to an increase in inventory, which could impact cash flow and potentially affect pricing in the coming months. The company also delivered 9.6 gigawatt hours of energy storage products, higher than the 9.4 gigawatt hours delivered in the second quarter of 2024 but lower than the 10.4 gigawatt hours delivered in the first quarter of 2025. Energy storage is Tesla's second-largest business after vehicles.

Investors are also looking forward to updates on the upcoming new vehicle model. The company's vehicle engineering vice president had mentioned plans to launch a new vehicle model this year, although details have been scarce. Investors hope that this new model will provide a boost to sales growth.