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Tesla Earnings Preview: Here’s What to Watch For

Tesla (NASDAQ: TSLA) is scheduled to report second-quarter 2021 earnings on July 26 after the market closes. In the past year, shares of the electric vehicle…

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This article was originally published by TipRanks

Tesla (NASDAQ: TSLA) is scheduled to report second-quarter 2021 earnings on July 26 after the market closes. In the past year, shares of the electric vehicle behemoth have skyrocketed more than 110% and are currently trading at over $660. A strong set of numbers could send shares on an upward trajectory, so let’s take a closer look at what analysts on the Street are expecting.

Tesla Earnings Preview

Tesla is expected to report adjusted EPS of $0.96 on revenues of $11.22 billion. Meanwhile, the Earnings Whisper number, or the Street’s unofficial view on earnings, stands at $0.91 per share.

Prior Period Results

In the previous quarter, the company reported triple-digit growth with adjusted earnings of $0.93, compared to the prior year quarter. That said, the result topped the consensus estimate of $0.75. In addition, revenue rose 74% to $10.4 billion, but marginally missed analysts’ expectations of $10.48 billion. (See Tesla stock chart on TipRanks)

Factors To Watch Out For at Tesla

The electric vehicle market pioneer with the striking product design posted its seventh profitable quarter for the January-March period. Despite seasonality, unstable supply chain, and the company’s transition to the new Model S and Model X, Tesla recorded its highest ever vehicle production and deliveries.

The trend is expected to continue in the to-be-reported quarter, as elevated demand for vehicles was perceived in the second quarter as well. This was due to the rising popularity of green vehicles, changing customer preferences post the pandemic outbreak, fiscal stimulus, and vaccination-driven gradual economic recovery.

Notably, Tesla delivered 201,250 units in the second quarter, which rose from the 90,650 deliveries in the same quarter last year and the 184,800 vehicles delivered in the prior quarter.

That notwithstanding, cost-management leading to a reduction in average cost of the vehicles remains the priority for Tesla, the positive impact of which can be expected in the results. Notably, while the average selling price of vehicles decreased in Q1, the company posted a higher auto gross margin on the decline in costs.

During the last earnings call, management commented, “About three and a half years into its production, and even without a European factory, Model 3 was the best-selling premium sedan in the world, outselling long-time industry leaders such as the 3 Series and E-Class. This demonstrates that an electric vehicle can be a category leader and outsell its gas-powered counterparts. We believe Model Y can become not just a category leader, but also the best-selling vehicle of any kind globally.”

Vehicle sales for the automaker ramped up in the to-be-reported quarter, as escalating demand for Model 3 and Y was visible. Markedly, in the second quarter, the Model 3/Y unit vehicle deliveries of 199,360 more than doubled on a year-over-year basis, while increased 9% sequentially.

Over the coming years, management expects to achieve 50% average annual growth in vehicle deliveries.

In the Q1 press release, Tesla said, “We are currently building Model Y capacity at Gigafactory Berlin and Gigafactory Texas and remain on track to start production and deliveries from each location in 2021. Gigafactory Shanghai will continue to expand further over time. Tesla Semi deliveries will also begin in 2021.”

Additionally, Tesla’s Solar Roof and Powerwall products are likely to have aided growth for solar and energy storage deployments in the second quarter.

Analyst Recommendations

On July 16, Bank of America Securities analyst John Murphy maintained a Hold rating but increased the stock’s price target to $750 (13.6% upside potential) from $700.

Murphy anticipates “beats across the board versus low expectations and outlooks” for the automotive industry in Q2.

In a note to investors, the analyst said that the impact on sales due to the current semiconductor shortage is generating additional pent-up demand “to be more rationally released over a multi-year recovery.”

Recently, Goldman Sachs analyst Mark Delaney reiterated a Buy rating and a price target of $860 (30.2% upside potential) on the stock.

Delaney increased its earnings expectations to $0.94 per share from $0.84, prior to Tesla’s second-quarter earnings report, considering updates to the Model Y to drive earnings higher.

Nevertheless, the analyst believes that his price target is exposed to risks based on chip shortages, elevated freight expenses, and a rise in input prices.

Overall, the stock has a Hold consensus rating based on 10 Buys, 6 Holds, and 7 Sells. The average Tesla price target of $642 implies 2.8% downside potential from current levels.

According to the new TipRanks’ Risk Factors tool for the company, the Tesla stock is at risk mainly from two factors: Finance and Corporate, and Production risk, which contribute 31% and 29%, respectively, to the total risk for the stock. Within the Finance and Corporate risk category, TSLA has 13 risks, details of which can be found on the TipRanks website.

The post Tesla Earnings Preview: Here’s What to Watch For appeared first on TipRanks Financial Blog.

Energy & Critical Metals

Daimler Truck’s powertrain plants in Germany will produce electric drive components

Following intensive talks, Daimler Truck AG and the Works Council have agreed that the three powertrain sites in Gaggenau, Kassel and Mannheim will specialize…

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Following intensive talks, Daimler Truck AG and the Works Council have agreed that the three powertrain sites in Gaggenau, Kassel and Mannheim will specialize in different components for electrified drives.

In the future, they will drive the global production of battery-electric and hydrogen-based drive systems in a production and technology network for electric drive components and battery systems, together with the sister plant in Detroit. Significant additional investments in future technologies at the Daimler Truck powertrain plants will drive technological change.


  • The Mercedes-Benz plant in Gaggenau, which specializes in heavy-duty commercial vehicle transmissions, will develop into a competence center for electric drive components as well as the assembly of hydrogen-based fuel cell drive components.

  • The Mercedes-Benz plant in Kassel is expanding its current focus on commercial vehicle axles and will become a competence centre for electric drive systems.

  • The Mercedes-Benz plant in Mannheim, specialized in commercial verhicle engines, is drawing on the more than 25 years of experience of the Competence Center for Emission-free Mobility (KEM) located at the plant and is focusing on battery technologies and high-voltage-systems.

Important scopes for alternative drives, such as the production of electrically driven axle systems, e-motors and inverters, as well as the assembly of fuel cell systems, will be integrated into the powertrain plants in the future, in addition to investments in the reprocessing and recycling of battery systems.

Our industry is undergoing a transformation toward CO2-neutral trucks. Since conventional drive systems will also be with us for some years to come, we are focusing the future orientation of our powertrain plants primarily on flexibility, cost-effectiveness and very well-trained employees. This had to be reconciled in our negotiations with the Works Council. With the production and technology network for electric drive components and battery systems in conjunction with the competence centers at the plants, we have succeeded in doing so. In this way, we are creating optimum conditions for maximum competitiveness for our plants and at the same time laying the foundations for a successful future.

—Yaris Pürsün, Head of Global Powertrain Operations Daimler Truck

Another element of the technology network for electric drive components and battery systems are the innovation laboratories (InnoLabs). In addition to the competence centers, these are being set up at all plants. They specialize in innovative production processes, new technologies and products.

The aim of the InnoLabs is to close the gap between prototype production and series development. Series start-ups are thus to be prepared with maximum efficiency so that products can be transferred from the prototype phase to series production as quickly as possible. With the InnoLab Battery located at the Mercedes-Benz plant in Mannheim, Daimler Truck AG will establish its own pilot battery cell production and thus lay an important foundation stone for future competence in battery technology.

In its transformation toward CO2-neutral transportation, Daimler Truck is focusing on two all-electric drive technologies: battery and hydrogen-based fuel cell. With these, every customer application can be covered with full flexibility in terms of routes—from well-plannable, urban distribution transport to multi-day transports that are difficult to plan. Which solution is used by the customer depends on the specific application.

As the first battery-electric truck, the Mercedes-Benz eActros for routes in distribution transport will go into series production at the Mercedes-Benz plant in Wörth in October 2021, followed by the eEconic next year. The battery-electric eActros LongHaul for long-distance transport will follow from the middle of the decade. Key components be manufactured at the powertrain plants in the future.

In addition to the products, the powertrain plants are to become CO2-neutral from 2022, just like all other European Daimler Truck plants. This will be made possible, among other things, by a green power concept at Daimler: CO2-free power procurement from renewable energy sources will form the basis for CO2-neutral production. As part of this, the sites will purchase electricity from wind and solar farms as well as hydropower plants from 2022 onwards. On the way to becoming green production sites, the Mercedes-Benz powertrain plants are also to operate CO2-free in the long term by successively establishing fully renewable energy systems over the next few years.

The sister plant in Detroit, which is part of the global production network for powertrain components, will continue to strengthen its role in the US market and, as a competence center for electric powertrain components, make an important contribution to shaping sustainable transportation in the American market.

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Energy & Critical Metals

Tata Steel contracts for 27 electric trucks for transportation of finished steel in India

As part of its sustainability initiative, Tata Steel is partnering with an Indian start-up to deploy electric trucks for its steel transportin India. This…

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As part of its sustainability initiative, Tata Steel is partnering with an Indian start-up to deploy electric trucks for its steel transportin India. This marks the first use of EVs by any steel producer in the country for transportation of finished steel.


The electric trucks feature a 230.4 kWh Lithium-ion battery pack with a cooling system and a battery management system giving it capability to operate at ambient temperatures upto 60 °C (140 °F). The battery pack will be powered by a 160-kWh charger setup which would be able to charge the battery from 0 to 100% in 90 min. With zero tail-pipe emission, each electric vehicle would reduce the GHG footprint by more than 125 tCO2e every year.

Tata Steel has contracted for 27 EVs, each with a carrying capacity 35 tonnes of steel (minimum capacity). The company plans to deploy 15 EVs at its Jamshedpur plant and 12 EVs at its Sahibabad plant. The first set of EVs for Tata Steel are being put in operation between Tata Steel BSL’s Sahibabad Plant and Pilkhuwa Stockyard in Uttar Pradesh.

At a virtual ceremony organized on July 29, Tata Steel formally flagged-off the loaded vehicle at the Pilkhuwa Stockyard to move to the Sahibabad plant, 38 km away.

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Energy & Critical Metals

Tesla Is Hiking Prices In The U.S. While Slashing Them In China

Tesla Is Hiking Prices In The U.S. While Slashing Them In China

After posting its most recent earnings "beat", Tesla is taking on two starkly…

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Tesla Is Hiking Prices In The U.S. While Slashing Them In China

After posting its most recent earnings "beat", Tesla is taking on two starkly different strategies for its U.S. and its China business. 

In the United States, the automaker is raising prices in an attempt to boost profit margins, while in China it is keeping prices steady in what is likely an attempt to drum up more demand, Reuters reported

So far, Tesla has raised the price of its Model 3 and Model Y "about a dozen times" in the U.S. this year, the report notes. At the same time, the company also introduced an affordable version of its Model Y in China.

Tesla isn't just facing increased scrutiny in China from its citizens and the government, but is also running face-first into a wall of Chinese EV competitors. 

Toni Sacconaghi of Bernstein has questioned demand in China as a result of the introduction of the lower priced Model Y. He has said that the model "may make sustained margin improvement difficult". Chinese owners were "were less enthusiastic and had lower repurchase intentions than owners in the United States and Europe," a Bernstein survey recently showed.

Meanwhile in the U.S., Tesla continues to raise the price of its Model Y long range, which is now priced at $53,990. In China, the more affordable Model Y is priced at $42,394.

Roth Capital Partners analyst Craig Irwin told Reuters: "I think Tesla is looking to be as competitive as it can be in China. Lower prices will be a part of that aggressive market positioning. There is a very large difference in battery prices in the U.S. and China, as well as local vehicle manufacturing costs."

Hargreaves Lansdown analyst Nicholas Hyett added: "It wasn't so long ago that the group was trimming prices in the U.S. to gain scale and maximize profitability, and it feels like we're now seeing that in China too."

Gene Munster at Loup Ventures attests that the lower prices in China could "have a lasting effect" for the company in the country: "Teslas are on average 3x the cost of a typical EV made in China so they have to be priced less than the U.S. to compete. Prices of Teslas in China will be below (the) rest of the world for the next decade."

Tesla's market share in China has fallen to 11% in the battery electric vehicle market. China makes up 44% of the global EV market. 

 

 

 

Tyler Durden Fri, 07/30/2021 - 10:36
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