Tesla (TSLA) – Get Tesla Inc. Report shares edged higher Tuesday following data from China indicating a steep decline in July sales and exports amid planned maintenance breaks at its Shanghai gigafactory.
Tesla sold 28,217 China-made cars last month, the China Passenger Car Association (CPCA) said Tuesday, with around 19,756 of the units exported to other markets.
The figures represent a sharp decline when compared to the 78,000 units sold in June, although the decline was linked to production suspensions in Shanghai that kept the plant idle for much of the month as it re-tools various systems to allow for weekly unit expansion over the coming months.
Tesla CEO Elon Musk told investors at the group’s annual general meeting last week that he expects to hit a production run-rate of around 2 million vehicles per year by December, and hinted at the construction of a new gigafactory to compliment existing facilities in Shanghai, Berlin, Austin and Freemont.
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Late last month, Tesla posted stronger-than-expected second quarter earnings and reiterated its goal for full-year delivery growth despite input price pressures and narrowing profit margins.
Tesla said adjusted earnings for the three months ending in June rose 56.5% from last year to a Street-beating, $2.27 per share, although revenues were modestly light at $16.94 billion.
Gross automotive margins were 27.9%, Tesla said, a 500 basis point decline from last year, Tesla said, just inside the Street forecast of 28.2%, owing to put a surge in input costs and expenses linked to the ramp-up of new factories in Austin and Berlin.
The group also said it expects full year deliveries to grow 50% from 2021 levels, implying a target of 1.4 million vehicles that Tesla CFO Zachary Kirkhorn said has become “more difficult but remains possible with strong execution.”
Tesla shares were marked 1.23% higher in pre-market trading to indicate an opening bell price of $882.00 each, a move that would push the stock to a 40% gain from its late-May lows. .