Tesla (TSLA) will report second-quarter earnings late Monday, as Wall Street expects updates on chip and battery shortages among other issues hampering production. Tesla stock fell.
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Tesla Earnings
Estimates: Analysts expect earnings to more than double to 90 cents a share compared to the year-ago quarter. Sales are seen jumping 89% to $11.39 billion.
Results: Check back after the close Monday.
Tesla previously reported Q2 deliveries shot up 122% from a year ago to 201,250 vehicles. That should include the new Model S Plaid, which began deliveries last month after several delays. But now Model S deliveries are on hold, sources told Electrek.
Meanwhile, look for a Bitcoin impairment charge in Q2, as the cryptocurrency lost half its value during the quarter.
In Q1, Tesla recorded proceeds from sales of digital assets of $272 million and net digital assets of $1.33 billion on the balance sheet. Tesla bought $1.5 billion in Bitcoin in February.
On Wednesday, CEO Elon Musk said Tesla may resume accepting Bitcoin as payment for EVs if Bitcoin’s use of renewable energy trended beyond 50%.
Analysts are also keen to see the impact of regulatory credits on revenue for the quarter. Last quarter, Tesla reported a 46% jump to $518 million in revenue from sales of regulatory credits. But those are expected to wane as rival automakers ramp up their EV production to meet emission standards on their own.
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Tesla Stock
Shares fell 0.9% to 643.38 in Friday’s stock market trading. Tesla stock has lost nearly 30% of its value from its all-time high of 900.40 in January but recently found support at the 40-week line on its weekly chart, and now it’s spending some time above its 10-week moving average, according to MarketSmith chart analysis.
Meanwhile, the Leaderboard stock’s relative strength line is trending downward. It has an RS Rating of 78 out of 99 and an EPS Rating of 74.
Among automakers with an expanding EV footprint, General Motors (GM) and Ford (F) each slipped 0.8%, while Volkswagen (VWAGY) fell 1.3%. China-based rivals Nio (NIO) and Li Auto (LI) each dropped 5%, while Xpeng (XPEV) slumped 5.5%.
Chip, Battery Shortages
With Intel (INTC) reporting Thursday that the chip shortage is likely to last at least two more years, automakers including Tesla will be impacted for some time. But those shortages are also affecting other EV makers and auto production generally, giving Tesla pricing power.
Battery shortages are also an issue, as raw materials continue to be in short supply. As a result, on Thursday Tesla inked a supply deal with BHP (BHP) for nickel. Terms of the deal were not disclosed.
BHP will supply Tesla with nickel from its Nickel West asset in Western Australia. Earlier this year, EV maker Tesla confirmed that the company was seeking to buy around $1 billion per year in battery minerals from Australia alone.
Nickel is a key mineral in lithium-ion batteries, which is the linchpin of Tesla’s next-generation battery cell.
“With all of these headwinds, Tesla still impressively hit 200k+ deliveries in the June quarter and appear to be on a trajectory to possibly hit 900k for the year with a stronger 2H on the horizon in our opinion,” said Wedbush’s Daniel Ives in a July 21 note to clients.
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Semi, Cybertruck Production
Earlier this week, it was reported that Tesla’s long-delayed semi truck was ready to begin production at the company’s Nevada factory.
The Semi would presumably require 4680 battery packs, which are not yet mass produced. Tesla’s Cybertruck is also rumored to be approaching production launch.
Look for Tesla to possibly also offer an update on the opening of its Austin and Berlin plants, as well as Model Y sales.
Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.
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