Tesla (TSLA) shares surge 6.9% on surpassing Q2 2023 delivery and production expectations.

Shares of electric vehicle maker Tesla Inc (NASDAQ: TSLA) increased by almost 7% on Monday as the company reported strong results for Q2 deliveries and production. The company surpassed expectations after reducing prices to boost sales. Tesla lowered its prices in selected markets including China and the US. CEO Elon Musk stated that pursuing higher sales with lower profits was the right choice for the company.

Tesla Beats Expectations in Q2 2023 Deliveries and Production

In Q2, which ended on June 30, 2023, Tesla delivered 466,140 vehicles, surpassing analysts’ expectations of 445,925 by over 20,000 cars. In addition to the discounts driving the delivery numbers, a $7,500 federal tax credit under the Inflation Reduction Act in the US also contributed to the figures. Tesla also increased its vehicle production to nearly 480,000 within three months. In response to the Q2 deliveries and production, Bill Russo, the founder and chief executive of advisory firm Automobility, commented, “Tesla has chosen to be a high-volume manufacturer.” He also noted that the Model 3 and Model Y benefited from the price reduction, leading to increased sales.

Dan Ives, an analyst at Wedbush, also commented on Tesla’s performance in Q2 regarding deliveries and production. He praised the EV maker for lowering prices in China, describing it as a “smart strategic move that was highly successful for Tesla.”

Tesla is facing increased competition in many parts of the world, which prompted the company to consider price reductions this year. After recognizing that lower prices have impacted its products, the manufacturer stated in April that it had no plans to stabilize vehicle prices. The CEO explained that the purpose of lowering prices is to make their vehicles more affordable at a larger scale.

Meanwhile, Li-Auto announced that its deliveries reached an all-time high of 32,575 in June. The company achieved its third consecutive monthly sales record last month. Similarly, Shanghai-based Nio and Guangzhou-based Xpeng reported high deliveries in June. Nio delivered 10,797 vehicles, while Xpeng’s deliveries increased to 8,620.

Following the company’s weak financial performance in 2022, Tesla shares have rebounded and consistently risen. The EV giant has grown by 127.16% since the beginning of the year and is up 23.13% over the past year. The company has also gained 43.67% in the last three months and an additional 28.59% in the past month. Over the past five days, TSLA has increased by 16.08%.

In after-hours trading, Tesla stock is down 0.34% at $278.87 after closing up 6.90% at $279.82.

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