Big Week for Automakers: Tesla, GM, Ford, and More Deliveries Coming Soon! 🚗

The upcoming week will see crucial developments in the automotive sector, highlighted by Tesla’s Q2 delivery report. Tesla is expected to announce a decrease in quarterly deliveries, with estimates revised downward due to concerns over consumer demand in Europe and China. Barclays predicts 415,000 deliveries, RBC Capital Markets estimates 410,000, and UBS forecasts 420,000, all marking significant declines from previous estimates. Despite this, the focus is shifting towards Tesla’s long-term projects like the Robotaxi and Full Self-Driving (FSD) initiatives, with a major event scheduled for August 8, 2024.

While some analysts are optimistic about Tesla’s technological advances, others remain skeptical about immediate financial benefits. Broader market reactions are cautious, with mixed sentiments on Tesla’s future performance. Other key updates will come from Chinese EV makers and traditional automakers, providing a comprehensive view of the industry’s health.

Tesla’s Anticipated Drop in Q2 Deliveries

Analyst Forecasts and Expectations

Tesla (TSLA) is anticipated to announce a decrease in quarterly deliveries in its Q2 update, expected in the first few days of July. This delivery report precedes the company’s full Q2 earnings release by a few weeks. Concerns over consumer demand and registration data from Europe and China have led analysts to revise their estimates downward.

Barclays has reduced its forecast to 415,000 cars, marking an 11% year-over-year decline. RBC Capital Markets also slashed its estimate to 410,000 vehicles, a significant drop from its previous forecast of 533,000 deliveries for Q2. UBS set its estimate at 420,000 vehicles. For context, Tesla delivered 386,810 vehicles in Q1 and 466,140 vehicles in Q2 of the previous year. Tesla’s highest quarterly delivery tally was in Q4 2023, with 484,507 units delivered.

Market Sentiment and Future Outlook

Despite the anticipated drop, some analysts believe the Q2 deliveries report will be less dramatic due to Tesla’s high-profile Robotaxi event scheduled for later in the summer. Investor focus has shifted from immediate delivery estimates to the long-term potential of Tesla’s Robotaxi and Full Self-Driving (FSD) initiatives. The Robotaxi event, set for August 8, is expected to unveil details on a low-cost, next-generation vehicle for the masses.

However, UBS remains skeptical about the Robotaxi event being an immediate catalystA stock catalyst is an engine that will drive your stock either up or down. A catalyst could be news of a new contract, SEC filings, earnings and revenue beats, merger and acquisit... More for Tesla’s share price. While recognizing Tesla’s technological progress on the Robotaxi and Optimus projects, UBS sees the financial benefits as more long-term. Conversely, Susquehanna highlights several tailwinds for Tesla’s stock, suggesting it is a good time to buy long call options. The firm points to reduced volatility, positive seasonal trading patterns, and underperformance relative to the S&P 500 as factors setting up Tesla for gains.

Broader Market Reactions

On Seeking Alpha, analysts remain cautious. Dividend Sensei recently outlined six reasons why Tesla’s robotaxi ambitions might fail. Before the Robotaxi event, Tesla will need to report its Q2 earnings. Historically, Tesla has missed consensus quarterly estimates more often than it has met them, with TSLA shares dropping in the week following earnings in three of the last four quarters.

TSLA Technical Analysis

This is a daily chart for Tesla Inc. (TSLA) with several technical indicators and moving averages. The stock’s price closed at $197.88 on June 28, 2024.

The price is currently below the 200-day moving average (red line) at $210.12 but above the 50-day moving average (blue line) at $179.89. This indicates the stock is in a short-term uptrend but still in a long-term downtrend.

The volume shows a recent increase, with the latest reading at approximately 95.44 million shares, suggesting heightened trading activity.

The Relative Strength IndexIn the world of technical analysis, the Relative Strength Index (RSI) stands as a cornerstone tool for traders seeking insights into market momentum. Developed by J. Welles Wilder ... More (RSI) is at 66.23, approaching overbought territory, indicating potential for a price pullback or consolidation soon.

The On-Balance VolumeThe On Balance Volume indicator (OBV) is a technical analysis tool used to measure the flow of money into and out of a security over a specified period of time. It is a cumulative ... More (OBV) has been relatively flat but shows a slight uptrend recently, suggesting that buying volume is starting to pick up.

The Stochastic RSIIn the realm of technical analysis, the Stochastic RSI (StochRSI) emerges as a powerful tool for traders seeking to navigate market dynamics with precision. Developed by Tushar S. ... More is at 1.000, which is in the overbought zone, further suggesting the potential for a price correction.

The Average Directional IndexThe Average Directional Index (ADX) stands as a cornerstone indicator in the toolkit of technical traders, offering insights into the strength of market trends. Developed by Welles... More (ADX) is at 22.62, which indicates a weak trend. Values below 25 typically suggest that the market is trendless or trading sideways.

The Chaikin OscillatorNamed after its creator Marc Chaikin, the Chaikin Oscillator stands as a formidable tool in the arsenal of technical analysts. This oscillator is designed to measure the accumulati... More shows a positive value of 33.65 million, suggesting buying pressure.

Overall, Tesla’s stock is showing short-term bullish signs but remains under long-term bearish pressure. The increase in volume and positive Chaikin Oscillator signal buying interest, but the overbought RSI and Stochastic RSI suggest caution. The weak ADX indicates the absence of a strong trend.

Time-Frame Signals: For the 3-month horizon, hold. For the 6-month horizon, hold. For the 12-month horizon, buy, assuming the price can break above the 200-day moving average and sustain upward momentum.

Other Key Deliveries and Sales Reports

Chinese EV Makers and Other Startups

In addition to Tesla, investors will receive delivery updates from several other electric vehicle manufacturers, including NIO (NIO), XPeng (XPEV), Li Auto (LI), Rivian Automotive (RIVN), Lucid Group, and Polestar Automotive (PSNY). These updates will provide insights into the performance of these companies amid evolving market conditions.

Traditional Automakers’ Performance

Quarterly sales reports from major automakers such as General Motors (GM), Ford Motor (F), Honda Motor (HMC), and Toyota Motor (TM) will also be closely watched. S&P Global Mobility projects that new light vehicle sales volume in June will rise by 1% year-over-year, reaching 1.40 million units. This volume translates to an estimated sales pace of 16.2 million units, the highest monthly mark since May 2021.

Industry Trends and Challenges

Despite recent challenges, including a cyberattack on dealer management software and a stop-sale announcement on certain Toyota and Lexus vehicles, June U.S. auto sales are expected to continue the positive momentum from May. Supported by growing incentives and inventory levels, the monthly sales pace has advanced every month in the second quarter. The estimated 16.0 million-unit SAAR average for Q2 would be the highest quarterly mark since Q2 2021.

However, mixed signals about the second half of the year persist. Affordability concerns for new vehicles and the slower expected growth in inventories present challenges. As the automotive sector navigates these complexities, investors will closely monitor upcoming reports and events to gauge future performance and market dynamics.