Tesla’s Shanghai factory delivered nearly 80,000 vehicles in June

Yahoo Finance's Pras Subramanian joins the Live show to discuss shares of Tesla after the company announced that it delivered nearly 80,000 vehicles in June.

Video Transcript

BRAD SMITH: Welcome back to Yahoo Finance Live, everyone. Shares of Tesla, TSLA, got a big boost before the close yesterday after announcing some massive delivery numbers from their Shanghai plant in June. Monthly shipments of China-made vehicles, they reached nearly 79,000 last month, more than double the number posted a year ago. And for more on this, let's bring in Yahoo Finance's Pras Subramanian. Pras?

PRAS SUBRAMANIAN: Yeah, so talk about a big June that they hinted at, really delivered there. China numbers more than doubled, like you mentioned, from a year ago, up 145% month over month. And this is because we have been talking about how the company had shut down production for most of April, operating this closed loop system in May and June, where they were having workers stay there and then sleep there and work there. So finally, on June 10, they emerged from that.

And really, you can see the numbers here. I mean, almost 80,000 vehicles. We're talking about a massive-- that is a massive jump for that factory. And hopefully, for them, going forward, you'll see that kind of continue. But now there was a short-term blip in July. They're going to shut down the Model 3 and Model Y production lines for a little bit just to retool, optimize it, make them-- producing more vehicles come August or so. So you might see a short-term blip in July, but that's probably going to be really short-term. And then you're going to see them kind of take off down the year.

And the Chinese market overall doing quite well. We're seeing that in June, sales were up 22%. New energy vehicle sales up 130%. So the market itself is doing quite well in China. A lot of incentives there to buy EVs and cheaper smaller displacement cars. So Tesla will report on July 20, so we'll see what's going on for their full Q2. So but looking so far, so good, post that China shutdown.

BRAD SMITH: OK, and so I guess that was the big question, too. When we saw all of the automakers in China kind of doing well over this course of time, or at least, seemingly so because of the unclogging of throughput at this point in time, what does the prospect for the rest of the year hold at this point? Not just in China for that region as we know that there are going to be some stimulus efforts that move forward, but even more internationally, what does that mean for Tesla?

PRAS SUBRAMANIAN: So I think Bloomberg was reporting that because these incentives will last through the end of the year, we might actually see a bigger ramp-up through the end of year, as you buy these cars before those tax breaks go away. GM didn't have a good quarter last quarter in China.

So, you know, but they're hinting that things are getting better. So we'll see other automakers hopefully show more kind of performance in that market. But I think, Brad, I think you're right. It absolutely has to do with the fact that there's a lot of pent-up demand, but also these incentives that are going to be not around for too long until the end of the year.

BRAD SMITH: Absolutely. Pras, appreciate the breakdown here. We're going to continue to keep an eye on shares of TSLA as we get closer to the start of today's trading activity.