Electric car manufacturer, Tesla, has been having difficulties reaching its goals for a while now. The company’s stock remained in red in Q1 but it managed to surge right after the company announced its quarterly deliveries. According to MarketWatch, the company delivered about 95,200 vehicles in the second quarter of the year as reported on Tuesday.
Tesla Stock Surges After Release Of Q2 Report, The Tesla shares were down by over 30% this year due to the poor performance of the company in Q1. However, following an improvement in Q2, the shares increased by about 7% shortly after the announcement was made. One of the major reasons why the Q1 performance for the electric car manufacturer was disappointing is that the company decided to expand deliveries across the United States and was plagued with logistics issues that led to huge losses. There were other reasons like the rumors about a drop in the demand for the company’s earlier models.
Tesla was the worst performing stock of all the Nasdaq-100 because of what happened in the first quarter of the year. While it was down by 33%, the S&P 500 index SPX was up by 8.7% within the same period. However, on Tuesday, Tesla traded as high as $240 post the announcement.
While the surge in stock over a few hours was commendable, the investors will not be at rest until the company releases a full earnings report. This way, investors will know the financial health of the company by comparing things like cash flow, auto gross margins, and demand sustainability. If there are no improvements, Tesla may lose some of its investors.
Even if the second quarter units are better than the first the company’s profitability at the end of the year may still be affected. Hopefully, the company will make more deliveries in Q3 and Q4 to increase profitability.