Tesla Surges 10% in Q2 Sales from Turkey Norway

Tesla's second-quarter delivery figures have left analysts and investors puzzled, with the electric vehicle giant reporting a significant surge in sales from smaller, unexpected markets. The company's vehicle deliveries in Turkey and Norway last month were ten times the volume sold in Germany, despite these regions being minor in size compared to Europe’s largest economy. This sudden spike in sales helped Tesla meet its Q2 delivery estimates, but it also raised questions about the sustainability of such growth.

Investors are trying to understand where tens of thousands of cars suddenly appeared, with signs indicating that smaller markets may be serving as an outlet valve for Tesla. For instance, nearly 60% of Tesla’s entire first-half sales in Turkey were generated in June alone. This trend suggests that Tesla might be offloading cars built in its Berlin factory to these smaller markets, as many neighboring European markets have effectively shut the door on the brand due to reputational damage inflicted by CEO Elon Musk.

Tesla reported 7,235 vehicle sales in Turkey in June, giving it a 7.7% market share and making it the third-most popular brand after Renault and Volkswagen. In Norway, Tesla sold 5,646 vehicles, accounting for every third car sold in the country last month. This surge in volume from unlikely places helped Tesla meet market consensus with 384,000 cars delivered in the second quarter, causing the stock to rise in trading. Many experts had expected the number to come in closer to 360,000 vehicles given a lack of fresh product.

Part of the reason Tesla could surprise the market lies with the lack of transparency from the company relative to other carmakers. Tesla publishes deliveries once per quarter and only provides a split between volume—combined Model 3 and Y sales—and luxury, in which it groups the S, X, and Cybertruck together. This lack of detailed information makes it difficult for analysts to pinpoint the exact sources of the delivery surge.

However, this approach of relying on smaller markets to offload excess inventory may not be sustainable in the long run. Smaller markets like Norway and Turkey could saturate more quickly, leading to a potential halt in production at Tesla’s Berlin plant due to lack of demand. In more established markets like the United States, Tesla is also facing challenges, with sales dropping precipitously and the company losing market share aggressively.

Analysts are questioning whether the sudden spike in deliveries from countries not typically known for high demand for Tesla vehicles is a sustainable strategy. UBS analysts noted that while deliveries above expectations may be well received, there are questions about where these vehicles were sold, likely not in typical regions. This lack of clarity adds to the puzzle for investors trying to understand Tesla’s delivery strategy and its long-term implications for the company’s growth and market position.