Tesla (NASDAQ: TSLA) stock price has been under pressure over the last couple of months. Traders concerns over increasing market competition supported the bearish sentiments.
The share price tumbled from an all-time high of $380 at the beginning of this year to $240 a share at present. Tesla stock price bounced slightly since the start of the second half. Fortunately, the reports of higher than expected growth in deliveries during the third quarter could help in extending the upside momentum.
In an email to employees, Tesla CEO Elon Musk said the company ‘has a shot’ at delivering 100,000 cars during the third quarter. This is a new record for car deliveries. The company had delivered 95,000 electric cars during the previous quarter.
Elon Musk said, “The challenge is making sure that we have the right car variants in the right locations and rallying as much as our company resources as possible to help with the end of the quarter deliveries.”
The CEO also indicates that net orders are likely to reach 110,000 for the following quarter. This represents substantial demand for the Tesla electric vehicles.
Higher than expected growth in car deliveries also helps in defusing investors concerns over the trade war with China. The energy subsidy cut by China will not have any impact on Tesla, according to research firm China Renaissance.
The firm says Tesla never enjoyed any subsidy. Therefore, the subsidy cut is unlikely to impact its cost structure.
The analyst Carson Ng says they are optimistic about Tesla. They expect it to receive car purchase tax exemption of 10%. The analyst believes Tesla is well set to increase China deliveries from 13,000 units in fiscal 2018 to 135,000 units in fiscal 2021.
It’s true that increasing market competition in the EV market could create headwinds for sales growth. However, the latest market reports combined with its strong brand recognition is helping in beating the competition. Tesla stock price is likely to extend the upside momentum in the short-term.