TSLA Stock: 3 Things to Watch When Tesla Reports Q2 Earnings


  • Tesla (TSLA) is set to report Q2 earnings on Wednesday, July 20.
  • Wall Street is expecting the company to report a difficult quarter.
  • But some experts believe that the electric vehicle (EV) leader will see a stronger second half.
"TSLA stock" - TSLA Stock: 3 Things to Watch When Tesla Reports Q2 Earnings

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Wall Street is watching closely as Tesla (NASDAQ:TSLA) gears up to report second-quarter earnings. While TSLA stock is up today in anticipation, this season has been nothing short of turbulent. The EV leader already has reported a slowdown in deliveries for the quarter. Lockdowns in China that shuttered one of Tesla’s largest factories early in the quarter have cast a dark shadow over its progress since. And more recently, Tesla paused production at its Berlin and Austin, Texas factories. None of this bodes well for its Q2 earnings.

Things haven’t been all bad for Tesla during the quarter. Elon Musk’s attempts to terminate his acquisition of Twitter (NYSE:TWTR) are a positive catalyst in the long run. Additionally, investors are likely to shift focus to the proposed TSLA stock split after Wall Street moves on from the Q2 earnings report. But since the earnings call is approaching quickly, let’s take a look at the most important things that investors should be watching for.

TSLA Stock: Shanghai Shutdowns on Watch

As noted, the government-induced shutdowns in Shanghai have defined the second quarter for Tesla. The company’s Chinese production hub still managed to produce 10,000 EVs in April 2022. But even these impressive statistics didn’t stop Wall Street from having doubts.

In late May, Electrek reported that “Investors and analysts are trying to understand how the shutdown and ramp-up are going to affect Tesla’s performance in Q2 – especially now that Gigafactory Shanghai is now Tesla’s most productive factory.”

For a few weeks after that, Tesla worked hard to keep making up the ground it lost in Shanghai. But in late June, the company announced it would be pausing production there again.

On top of that, Tesla extended this pause to its factories in Berlin and Texas. The upcoming earnings report will give investors a clear picture of what they can expect from the more recent factory pauses.

Can Tesla Ramp Back Up?

In his recent take on TSLA stock, Wedbush analyst Dan Ives noted that he is focused on the second half of the year. That’s likely where most of Wall Street will be looking if Tesla reports disappointing numbers for Q2. However, there is reason to believe that Tesla is destined to come roaring back in Q3.

According to Electrek, “Tesla achieved record production in June – exiting the year’s first half – setting the automaker up for an impressive second half of the 2022.”

According to Goldman Sachs, this means a promising road ahead is for TSLA stock. “We believe that the record production in June is a sign that Shanghai is ramping back up well and that the company made progress recently at its Berlin and Austin factories,” Goldman analysts wrote.

Where Does Battery Production Stand?

With so much focus on Tesla’s EV production, it’s important not to lose sight of what keeps the cars on the road. The path to EV battery success has been challenging — and it’s not over yet. But Tesla recently had some positive news from its battery partner Panasonic (OTCMKTS:PCRFY). Last week, Panasonic announced plans to built a battery production plant in Kansas. Reuters reports that “By 2029, Panasonic plans to expand battery production capacity by three to four times, with most of the increase in North America.”

While that is not strictly limited to Tesla, it is good news for the EV leader. Investors should be watching carefully for updates on Tesla’s plans to continue battery production and development. Panasonic’s expansion should help Tesla as the company continues to scale production.

On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Samuel O’Brient has been covering financial markets and analyzing economic policy for three-plus years. His areas of expertise involve electric vehicle (EV) stocks, green energy and NFTs. O’Brient loves helping everyone understand the complexities of economics. He is ranked in the top 15% of stock pickers on TipRanks.

Article printed from InvestorPlace Media, https://investorplace.com/2022/07/tsla-stock-3-things-to-watch-when-tesla-reports-q2-earnings/.

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