Synopsis

Tesla shares plunged over 7% despite the EV maker reporting record second-quarter deliveries that beat Wall Street estimates. Analysts attributed the sell-off to profit booking after the stock's recent rally, with investors now focusing on Tesla's AI, robotaxi and self-driving ambitions for future growth.

Shares of Tesla crashed around 7.5% on Thursday even after the Elon Musk-led company posted record-setting second-quarter delivery numbers that smashed Wall Street's estimates.

Tesla shares closed at $393.45 per share on Thursday to record its steepest single-day plunge since July last year. This came after a 12% rally in the stock price earlier in the holiday-shortened week.Tesla Q2 business updateTesla on Thursday reported record second-quarter deliveries of 480,126 vehicles for the April–June period, up about 25% from a year earlier and well above analysts' average estimate of 402,776 vehicles, according to Visible Alpha data cited by Reuters.

Tesla meanwhile produced 451,758 vehicles during the quarter. The deliveries exceeded production by more than 28,000 vehicles, driving the company to draw down inventory that it built up during the first quarter. A key driver of its strong business update was growth in Europe, while US sales appeared to be down.

Also read: Ferrari and BMW join Tesla, China in switch from copper to cheaper aluminium

The Elon Musk led company’s China-made EV sales have risen this year, buoyed by production of the refreshed Model Y, despite strong competition from BYD and domestic automakers. The company said it will report quarterly results on July 22 after markets close.
Why did Tesla shares fall after record Q2 updateTesla shares had rallied 12% during the week till before Thursday amid strong expectations from the EV carmaker’s business update. Analysts and investors said optimism had already been priced in, which may have led to some profit booking after the business update.

"The stock price is still riding a bit of a rollercoaster. Investors are hyped about the bounce-back, but the big money is still waiting to see if Tesla can actually deliver on Elon Musk's promises around AI, robotaxis, and self-driving tech," Reuters quoted David Wagner, head of equity at Tesla shareholder Aptus Capital Advisors, as saying.

Also read: Elon Musk-owned EV giant posts record second-quarter sales deliveries
Tesla launches 6-seater version of Model YAlong with the business update, Tesla on Thursday launched the six-seater variant of its best-selling Model Y SUV in US, as it aims to boost sales of its electric vehicles after the removal of a key tax credit. According to its website, the price of the launch version of the car starts from $61,990.

The EV maker said its Model Y with extended wheelbase is now also available in the United Arab Emirates, in a separate post on social media platform X.

Also read: Market Skepticism | Why Tesla’s best delivery quarter still triggered a sell-off

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