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Tesla Q2 earnings preview: Why 2022 production target is key

·Senior Reporter
·2 min read
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It will be make-or-break for Tesla (TSLA) come Wednesday after the bell, as the electric vehicle maker releases its second quarter earnings report.

The Street is expecting Tesla to report:

  • Q2 Revenue: $16.88 billion

  • Q2 Adjusted EPS: $1.83

That revenue figure would represent a nearly $2 billion drop sequentially from a quarter ago, which reflects issues Tesla experienced during Q2 due to COVID-related shutdowns at its Shanghai Gigafactory.

On the profitability end, Tesla is expected to report adjusted net income, operating profit, and EBITDA figures that are higher than a year go, though lower sequentially.

A view of the Tesla service centre in Singapore July 16, 2022. REUTERS/Chen Lin
A view of the Tesla service centre in Singapore July 16, 2022. REUTERS/Chen Lin

On the positive side, investors will be more focused on the path ahead for Tesla, looking at what CEO Elon Musk and execs have to say about Q3 and the second half of 2022.

Questions that will be top of mind will center around ramp ups at the Giga Texas and Giga Berlin plants, whether Giga China is back to full operating capacity, and whether Tesla will reaffirm its 2022 delivery target of 50% CAGR (compound annual growth rate) year over year. Maintaining that rate would mean Tesla will delivery around 1.4 to 1.5 million vehicles in 2022.

In a note to clients yesterday, Deutsche Bank analyst Emmanuel Rosner wrote that he expects Tesla will maintain its annual delivery target, which he says implies “considerable volume ramp in the second half."

Rosner added Tesla to the firm’s short-term “Catalyst Call Buy List,” advising clients to accumulate shares following Tesla’s pullback this year. As of this afternoon, Tesla stock is down 31% year to date, though it is still up 10% over the past year.

As far as future models go, investors, analysts, and Tesla fans will be eager to hear any updates on volume production of the Cybertruck, which is slated for production next year and whether the “robotaxi” product Musk had mentioned in last quarter’s earnings call was still on target for a 2024 launch. The robotaxi will supposedly be an autonomous product with no steering wheel or pedals.

Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.

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