June EV Deliveries Move The Market

EV Production Ramps Higher And The Markets Respond

The world's major EV manufacturers just release their June delivery data and by all accounts the data is good. Signs within the industry show ramping production despite global chip shortages and the upgrades are already rolling in. The news highlights a growing rift between the raft of EV startups with no production, revenue, or earnings and their better-established brethren. Those companies that are already in production, are delivering vehicles and making money.

EV Leader Tesla Tops 200,000 Vehicles In the Second Quarter

Tesla NASDAQ: TSLA reported a mixed second-quarter in regards to the range of analyst estimates but a strong quarter nonetheless. The company delivered a total of 201,250 vehicles for a gain of 122% over last year and 125% over 2019. The range of analyst estimates ran from 181,000 to 230,000 but the key figure to beat was 200,000. In the statement, Tesla reminded us the delivery count should be taken with a grain of salt because a car only counts as delivered when a customer accepts it. Tesla actually produced 206,421 vehicles which point to solid revenue and earnings gains for the quarter.

Wedbush Securities analyst Dan Ives was the first to chime in. According to him, the quarter was impressive amid supply chain issues within the industry. In his view, a strong second-half performance should push Tesla's annual deliveries to over 900,000 Which would be quite significant. In addition to the delivery data, Ives also points to the production strength which is ahead of consensus as well. Morgan Stanley is in general agreement with Wedbush but calls out Tesla for a different catalyst. Analyst Adam Jones thinks the launch of Tesla India is going to get serious investor attention as the automaker expands into that market. Between them, they have an overweight/outperform rating with a consensus price of $950 compared to the broader census of $658.

Ford Is Charging Ahead With EV

Ford NYSE: F was late to the EV game but making big strides in the market today. Not only are we on the lookout for the electrified F150 series but the company's current lineup is doing quite well. While total US sales decreased nearly 27% in June electric vehicle sales surged by 117%. This drove first-half sales of EV cars to 56,570, still well below Tesla's 200,000 mark, but that gap should narrow quickly over the next year. In the meantime, the real competition for Tesla is coming out of China.

The Chinese EV Market Is In Hyper-Growth Phase

While the Chinese EV Market is still trailing behind Tesla as a whole it is ramping quickly and will likely rival or exceed Tesla's production results within a year or two. Total deliveries of vehicles from China's top three manufacturers exceeded 56,800 vehicles for the quarter or about 27% of Tesla's tally. Xpeng NYSE: XPEV, the smallest manufacturer by deliveries, achieved record deliveries in the second quarter totaling a 439% increase from the previous year. Li Auto NASDAQ: LI, the second smallest by deliveries, managed to increase volume by 166% while Nio NYSE: NIO, the largest by volume, increased sales by 116%. Shares of all three stocks fell more than 4% with shares of Lee Auto down 8% because the strength was priced in. In our view, this is setting up the next buying opportunity for the EV Market so get your investment capital ready.