Tesla 22Q2 Preview: Steady production recovery leads revenue growth

Tesla reported second-quarter deliveries of 254,700 units, down from 310, 000 units in the first quarter, impacted by the short-term shutdown in Shanghai for much of the quarter, but broadly in line with the upcoming consensus of 256,700 units and above Deutsche Bank's advance estimate of 245,000 units. Deutsche Bank believes the difference between the estimate and Tesla's final deliveries may be due to a better contribution from Berlin/Texas.

Deutsche Bank believes this conservatively reflects production inefficiencies associated with the short-term shutdown in Shanghai and the expansion in Berlin/Austin.

Production of Tesla factory in Shanghai gradually recovered and the factory will be closed for about 2 weeks for upgrades, bringing total production rates to 22,000 units per week. With the recovery of productivity in China, Deutsche Bank believes investors will now focus on growth in Berlin and Texas to gauge production in 2023 and beyond.

Deutsche Bank will continue to monitor Q2 earnings to understand the impact of the capacity of the two new plants on performance.

Deutsche Bank remains impressed with Tesla's pricing power in the consumer space. Compared to the beginning of 2021, Tesla has increased the price of its portfolio by 13% to 34%. In 2021 alone, Tesla made 10 price increases, followed by several more significant price increases in March and June of this year. Both prices and vehicle wait times have become longer, not shorter, reflecting Tesla's superior brand and product positioning.

Deutsche Bank believes that despite the ups and downs of the market in Q2, Tesla remains the higher-margin electric car maker through pricing power and operational leverage.

Bloomberg's consensus estimates for Tesla's 22Q2 results are revenue of $16.955 billion, up 23.2% YoY; adjusted net income of $2.13 billion, up 1.7% YoY; and adjusted earnings per share of $1.84, down 0.9% YoY.