Better-than-expected quarterly deliveries demonstrated the success of Chief Executive Elon Musk’s strategy to increase volumes through discounts, causing Tesla (TSLA.O) shares to increase by roughly 7% on Monday.
Due to the day’s advances, the market capitalization of the largest US electric vehicle maker increased by about $57 billion to $887 billion.
At $277, The stock has more than quadrupled in value so far this year and is well over analyst price estimates, prompting several brokerages to express concern that margins will suffer as a result of the aggressive discounting spree.
Rivian Automotive (RIVEN.O), an electric vehicle manufacturer based in Irvine, California, beat market expectations for second-quarter deliveries on Monday, despite having a difficult time ramping up production due to supply chain difficulties for months.
The stock ended the holiday-shortened session up 17.4%, reaching its highest level in more than four months.
Tesla’s Impressive Q2 Deliveries Surge By 83% Year-On-Year
According to analysts, Rivian may be able to gain market share in a competitive market if demand remains steady and efforts are made to address supply chain issues by building an internal drive unit.
Tesla delivered 466,140 automobiles between April and June, an increase of 10% from the previous quarter and 83% from a year earlier thanks to price reductions.
Additionally, the difference between the number of automobiles Tesla makes and delivers decreased from 17,933 in the first quarter to 13,560 in the second.
The stock’s median price objective is $210, or roughly 20% less than its most recent closing price. Tesla has a forward price-to-earnings ratio of approximately 62.9, which is far higher than Ford’s (F.N) 8.82 and close to Amazon.com’s (AMZN.O) 62.66.
In the first quarter, the company had a total gross margin of 19.3%. On July 19, when the company released its second-quarter financial results, Wall Street anticipated the metric to fall to 18.6%.