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Tesla EV deliveries hit by China lockdowns, production reaches new high

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Yahoo Finance Live anchors break down second-quarter deliveries for Tesla as EV production reaches a new high.

Video Transcript

BRAD SMITH: All right, guys, switching gears here. Tesla investors disappointed over the holiday weekend after the company posted its Q2 delivery numbers. Deliveries came in short of expectations at around 254,000. Though the production came in at 258,000, which Tesla said it was its highest production month in its history. And, Brian, a few things to break down around this.

Of course, the majority of the production and deliveries, they still continue to come in, Model 3, that mass market vehicle and then the Model Y as well, which is essentially just 75% of the same as the Model 3. And so with that, you have some of the production synergies there. But this is also a time where we know that there were significant price increases that are also being started to roll out.

And so I think there's a broader theme of the average selling price that we started to see for Tesla vehicles as well as across the technology landscape, if you will, thinking through whether that's HP, thinking through whether that's Microsoft, and some of their industry units right now, especially for Apple too. I think this average selling price theme is something that we could be talking about even more so over the course of this earnings season.

BRIAN SOZZI: Don't give away our HP downgrade segment yet, Brad. We have to talk about it a little bit later. But look, Tesla, I think the street is out here this morning. A lot of analysts I've seen are cutting their estimates for the back half of the year. You have JPMorgan analysts reiterating underweight rating on Tesla, with a price target under $400.

And now, the big concern is June appeared to be pretty strong for Tesla as that production ramped up, but the street has now pivoted to what the second half of the year might look like for this company. And a lot of folks are starting to say, if the economy is going to continue to slow, now this demand that has generally held up pretty well for Tesla, that may start to weaken at a time where their costs for batteries, for other raw materials remains high. That might pressure profits. It might put further pressure on the stock.

BRAD SMITH: Yeah. And it continues to come back to where the consumers are buying in and opting into new electric vehicles. We know that searches over the course of this year, given some of the higher energy and gas, specifically, prices, consumers have been searching more for electric vehicles. It's just a matter of when they might get delivered.

And over an extended period of time, what types of credits for the companies that are operating the production capacities, whether that's Ford, whether that's GM, whether that's Tesla, what type of credits they're given to now allow them and enable them within that production to at least have an alleviation of some of the pressures that they're seeing on the input costs, like getting vehicles out there as well right now.

BRIAN SOZZI: Yeah, I'm going to need about $80,000 in incentives to get one of these electric cars, but I'm just saying. But again, I'm a gas guy. We'll be able to table this discussion for right now. Again, you're seeing Tesla shares under a little bit of pressure here off of these delivery numbers, the top ticker on Yahoo! Finance.