Tesla, Inc. (TSLA) reported its third-quarter delivery numbers on October 2, falling short of what some analysts were expecting, causing the stock to drop over 6%. The EV maker delivered 462,890 vehicles between July and September, up 6.4% year-over-year. While this number marginally beat the average estimate of 462,000 vehicles, it didn’t quite meet higher expectations from Barclays and UBS, which had forecasted 470,000.
Tesla’s Q3 numbers were also ahead of the 435,059 vehicles delivered in the same period last year and slightly better than Q2’s total of 443,956 deliveries. Of the 462,890 deliveries, 439,975 were for Tesla’s popular Model 3 and Model Y vehicles, while the remaining 22,915 included the Model S, Model X, and Cybertruck.
Even though Tesla’s Q3 deliveries improved year over year and were better than the second quarter’s 443,956, the results still left some investors concerned. Tesla's share price dropped by around 4% shortly after the market opened on the day of the release of the delivery data.
Moreover, it raises concerns about Tesla’s ability to maintain its rapid growth, especially as competition intensifies in the EV space. For Tesla to avoid its first-ever annual decline in deliveries, it will need to achieve a record-breaking 516,344 deliveries in the fourth quarter.
Speaking of competition, Tesla isn’t alone in the race for EV dominance. Rivals like Li Auto Inc. (LI), XPeng Inc. (XPEV), NIO Inc. (NIO), and BYD Company Limited (BYDDY) also reported record-breaking deliveries in September.
LI, for instance, hit a record of 53,709 deliveries, up 48.9% year-over-year, while XPEV’s EV figures surged by over 52% from August and 39.5% year-over-year. BYD, Tesla’s biggest competitor in the global EV market, delivered 443,426 battery-electric vehicles in the third quarter, putting them just behind Tesla in quarterly numbers. Meanwhile, NIO reported a 7.8% quarter-over-quarter rise with 61,855 EV deliveries.
What’s Next for Tesla?
Tesla has a busy October ahead. The company’s third-quarter earnings report is due on October 23, and investors are particularly eager to see how Tesla’s profit margins are holding up. Meanwhile, the carmaker’s upcoming Robotaxi event on October 10 has drawn significant attention as the company is expected to share updates on its full self-driving technology, AI, and autonomous driving advancements. Analysts from Wedbush and Deutsche Bank have flagged the event as a potential catalyst for Tesla stock, which has already surged 20% over the past month. Both firms maintain buy ratings, with price targets of $300 and $295, respectively.
Despite the shortfall in Q3 deliveries, TSLA continues to innovate and expand its footprint in the EV and autonomous driving markets. Its solid position in China, along with continuous improvements in AI, could provide the momentum needed to meet future targets. Thus, adding this stock to your portfolio could be profitable.
However, investors concerned about Tesla’s near-term outlook could keep an eye on potentially strong companies like Rivian Automotive, Inc. (RIVN) and Lucid Group, Inc. (LCID) as alternatives. Let’s look at their fundamentals in detail:
Stocks to Hold:
Rivian Automotive, Inc. (RIVN)
Rivian has had a tough time in 2024, especially as an EV maker still working toward profitability in a challenging market. Even though its stock has recovered from April lows, it remains down nearly 55% year-to-date. However, there’s optimism as the company outperformed Wall Street’s top- and bottom-line expectations in the second quarter, reflecting its cost-cutting progress.
On August 6, RIVN reported a loss of $1.46 per share, which came in above analysts’ expectations, who had predicted a loss of $1.19 per share. Its revenue for the quarter came in at $1.16 billion (up 3.3% year-over-year), slightly surpassing analyst expectations of $1.15 billion. The company also earned $17 million in revenue from regulatory credits.
Although it posted a net loss of $1.46 billion for the quarter, RIVN’s cash position remains strong. The company ended the quarter with $7.87 billion in cash and investments, bolstered by a $1 billion unsecured convertible note from Volkswagen. Moreover, the company completed a retooling upgrade at its Normal, Illinois plant, producing 9,612 vehicles and delivering 13,790 units.
For 2024, Rivian has set a production target of 57,000 vehicles, incorporating necessary downtime for further upgrades and cost reductions. It aims for a 30% improvement in production line rate and a 20% reduction in material costs compared to its previous platform, reflecting its efforts to enhance efficiency and reduce expenses.
The company has also revamped its R1 pickup and SUV models with slight competitive price increases. These updates are expected to boost revenues and help Rivian achieve its goal of turning a profit on each vehicle by the end of the year. Overall, while Rivian continues to face challenges, its strategic initiatives and strong cash position provide a foundation for potential future growth.
Lucid Group, Inc. (LCID)
Luxury electric vehicle maker Lucid has recently gained attention after exceeding expectations in the second quarter and achieving a new delivery record. Over the past three months, LCID shares have gained more than 20%. The company delivered 2,394 vehicles in the quarter ended June 30, marking a solid 70.5% increase compared to the same period last year and a 22% rise from the first quarter. This performance beat analysts’ predictions of 1,889 vehicles, following a record-setting 1,967 deliveries in the first quarter.
Meanwhile, production is also on the rise, with the company building 2,110 EVs after its production dropped 27% year-over-year in the first quarter. Though production remains below its previous highs, the improvement signals a positive recovery for the company. Having produced 3,837 vehicles through the first half of 2024, Lucid aims to reach its target of 9,000 vehicles for the year, which would require 5,163 more units in the second half.
As Lucid’s production and deliveries rebound, the company reported a second-quarter revenue of $200.58 million, exceeding Wall Street’s forecast of $192.65 million. However, the company had an adjusted loss of $0.29 per share, slightly higher than the expected 26 cents. Nonetheless, the Ev maker ended the quarter with $4.28 billion in liquidity and even secured a $1.5 billion commitment from Ayar Third Investment Co, a partner of Saudi Arabia’s Public Investment Fund. This funding provides Lucid with a financial cushion through at least the fourth quarter of 2025.
Commenting on this, CEO Peter Rawlinson said he’s “very encouraged” by the momentum Lucid is gaining, especially with the anticipated launch of its first electric SUV, the Gravity, later this year. This new model is expected to help the company maintain its positive trajectory as it moves into the second half of 2024. With that in mind, investors could consider adding this stock to their watchlist.
