Time for the Robotaxi? Future trend in focus ahead of Tesla update

Tesla is expected to report a record number of deliveries for the third quarter next week, fuelled by strong sales growth in China. The upcoming Robotaxi event is likely to be a key focus, shaping the future trend of its stock.

Tesla is set to announce its quarterly delivery numbers next week, with analysts forecasting record third-quarter sales, largely driven by strong demand in China.

FactSet’s estimates suggest that Tesla will deliver 461,000 vehicles in the quarter ending September, reflecting a 6% year-on-year growth.

Meanwhile, Barclays raised its forecast to 470,000, marking an 8% annual rise and a 10% increase from the second quarter, noting that robust sales in China are likely to offset weaker performance in the US and Europe.

Potential record quarterly sales in China

According to the China Passenger Car Association (CPCA), Tesla sold 86,697 vehicles in August, with 23,241 of those for export, resulting in domestic sales of 63,456 cars.

This marks a 37.27% increase from July and a 2% rise compared to the same month last year. While the figure represents the highest monthly sales in 2024, it remains below Tesla’s record sales in 2022, which reached nearly 80,000 in May and September.

Despite the rise in August, Tesla’s total deliveries in China from January to August stood at 388,000, down 0.57% compared with the same period last year, according to CNevpost.

BYD continued to lead the Chinese New Energy Vehicle (NEV) market with a 37% share, followed by Geely with 7.2%, and Tesla in third place with a 6.2% share, a slight increase from 5.27% the previous month.

Tesla is expected to maintain strong sales momentum in September, with CPCA data showing 31,800 registrations in the first two weeks, indicating a potential monthly sales volume of more than 63,000 units.

In contrast, European sales remain sluggish, with Tesla delivering approximately 148,000 vehicles in Europe during the first seven months of 2024, equivalent to just two months’ worth of sales in China

Robotaxi event in focus

Tesla typically releases its quarterly delivery and production figures about two weeks before its earnings report, which is set for 16 October.

While positive delivery expectations are anticipated, the market’s attention often shifts to Tesla’s overall performance. This time, the spotlight will be on its Robotaxi event.

Originally planned for 8 August, the unveiling of Robotaxi was postponed to 10 October.

This initiative is part of Tesla’s broader strategy to develop fully autonomous vehicles using Full Self-Driving (FSD) technology, positioning it in the AI race.

CEO Elon Musk has stated that AI-driven products like Robotaxi and the Optimus humanoid robots will be manufactured at Tesla’s Austin factory. In April, Musk hinted that Optimus could be handling tasks within the factory by the end of 2024.

Tesla also aims to roll out FSD in China and Europe by the first quarter of 2025, pending regulatory approval. During the second-quarter earnings call, Musk suggested that the company might secure approval by the end of this year

Tesla shares’ trajectory

Tesla shares rose 1.08% to $257 (€230) on Wednesday, extending a three-day winning streak.

Despite this, Tesla remains the weakest performer among the so-called “Magnificent Seven” stocks, with only a 3.44% year-to-date increase, largely due to a sharp decline in growth.

However, since reporting its first-quarter earnings in April and unveiling plans to ramp up production of affordable EVs, the stock has rebounded by 84%.

While sales in China are expected to improve, the country’s recent slate of easing measures has also bolstered Chinese stock markets, including the EV sector.

Bank of America has reiterated its “BUY” rating for Tesla, setting a target price of $255 (€228), while UBS maintains its “SELL” rating with a target of $197 (€176).