eResearch | In Q2/2019, Tesla, Inc. (NASDAQ: TSLA) reported global sales of 95,200 electric vehicles (EV), a 51% increase compared with the previous quarter. This beat analyst expectations by 6.8% as they only anticipated 89,084 in sales.
Last month, Tesla hit record sales in the United States (U.S.) as they sold 25,700 vehicles, accounting for 84% of all EVs sold in the U.S. The Company has pledged to sell 360,000 to 400,000 vehicles by the end of 2019.
The EV industry has surged in the past five years as countries around the world implemented various subsidies and policies to promote the purchase of EVs. EV sales in the U.S. have increased by 81% to 361,307 in 2018 from 199,818 in 2017. EV sales globally have increased by 64% to 2.0 million in 2018 from 1.2 million in 2017.
In 2010, the U.S. federal government implemented a maximum tax credit of up to US$7,500 for each EV purchased. This credit is available for consumers until manufacturers reach 200,000 in EV sales, at which point, the credit is phased-out gradually for the respective manufacturer. In 2018, Tesla and General Motors Company (NYSE: GM) were the first to reach 200,000 in EV sales in the U.S., which triggered the start of the phase-out of the federal tax credit.
Investors lost confidence in Tesla in Q1/2019 due to a reported loss of US$702 million, attributed to a reduction in U.S. orders after the tax credit was halved to US$3,750 and logistic issues at Tesla’s international ports.
On July 1, 2019, the Company entered the second phase of tax credit reductions, lowering the credit to US$1,875. As there are only two more quarters left for federal tax credit on Tesla vehicles, the Company expects the remaining period with tax credit to spur demand in H2/2019.
Tesla’s stock price is down almost 24% over the past year to US$234.81 compared with the S&P 500, up 12% and the TSX, up 10%. The positive news of record sales numbers for Q2/2019 pushed Tesla shares up 5.9% in trading from Tuesday’s close of US$224.55 per share.
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Tesla, Inc. (NASDAQ: TSLA)
Headquartered in California, United States, Tesla is an automotive and energy company that specializes in electric vehicles, as well as solar panels through their subsidiary, SolarCity. TSLA currently trades at US$234.81 per share with a market capitalization of US$41.5 billion.
Toyota Motor Corp (TYO:7203)
Headquartered in Aichi, Japan, Toyota is a multi-national automotive manufacturer. Toyota has plans to get half of its global sales from electric vehicles by 2025. TYO currently trades at JPY6,889 per share with a market capitalization of JPY22.4 trillion (US$206.5 billion).
BYD Co Ltd. (SHE: 002594)
Headquartered in Shenzhen, China, BYD is an automotive manufacturer that has diversified operations in automobiles, batter-powered bicycles, buses, forklifts, trucks, and mobile-phone batteries. BYD is currently the market leader in electric car sales in the world with 115,147 sales made up to May 2019. BYD Is currently trading at CNY53.26 per share with a market capitalization of CNY135.6 billion (US$19.5 billion).
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