Tesla and Aston Martin Face Challenges Amid Sales Rebound Hopes

Both automakers are hopeful of a sales rebound, but Tesla faces stiff competition while Aston Martin faces diminishing consumer self-assurance.

Can Tesla's Rebound Continue?

July has proven to be a productive month for Tesla so far, as it disclosed deliveries for the second quarter that exceeded analyst estimates. The share price increased approximately 25% over the subsequent few days and has since been trading at an equivalent level in anticipation of more granular details on the company's performance over the last three months. Tesla delivered 444,000 vehicles, which was fewer than the identical period of the prior year but above the 439,000 that analysts had anticipated. This has sparked hope that the sales glut that had been affecting the company was seeing a turnaround. The company had been losing market share in the face of increased domestic competition and in its second-largest market, China. However, the improved sales numbers might reflect that price reductions were finally paying off, as the increase has relied on cheaper Model 3 sales, including its LR version regaining eligibility for US EV tax credits.

However, investors seem to be looking at Tesla more as a robotics and AI firm than a car maker, with a lot of emphasis being on the company's plans for robotaxis and full-self-driving cars. Tesla is scheduled to hold an official launch of its self-driving taxis on August 8th to compete with Google's Waymo offering. So, the market reaction to the upcoming earnings could depend more on commentary relating to autonomous vehicles and advancements in AI development than the relative profitability of the automotive division. The consensus among analysts is that Tesla will see its EPS drop to $0.62 per share from $0.91 per share last year, despite a marginal decline in revenue to $24.7B from $24.9B for the second quarter of 2023.

Is the Aston Transformation Paying Off?

In the last quarter, Aston Martin disclosed that its wholesale vehicle sales numbers were down 26% year-on-year (YOY). To address this, the CEO discussed the transformation in the company's products, introducing new high-end models targeting customers unaffected by inflation. Analysts believe this will be successful, as the company's data expects wholesale vehicle sales to rebound to 1,062 for the second quarter.

Another focus for investors is the upcoming arrival of a new CEO at the end of the current quarter, which may impact any outlook under current management. The company is also anticipated to address reports that it has pushed its EV launch date to 2026. The interim report may also cover details on the cost and potential bottom-line impact of the recently agreed-upon pay raise for workers.

Wedge Reversal or Further Pain

Aston Martin's share price remains under pressure after failing to surpass key resistance levels and forming a double-top at 168 GBX, and could see further declines towards 100 GBX or below. However, breaking past 188 and 200 GBX handle may improve sentiment, with the share price potentially rising above 240 GBX, leaving behind a wedge pattern with a bottom at 128 GBX.

Source: SpreadEx / Aston Martin

Key Takeaways

Both Tesla and Aston Martin reported improved sales figures for Q2 and are hopeful of a continued rebound in their next earnings reports. However, Tesla faces stiff competition in the US and China, while Aston Martin relies on new high-end models to attract customers unaffected by inflation as it tries to regain consumer confidence impacted by delays in their EV launch.
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