IIn this video I will talk about You’re here‘s (NASDAQ: TSLA) China sales figures for June, the recent Tesla FUD and why Tesla stock is underperforming the market. Tesla shares are down 10% year-to-date as the NASDAQ Composite (NASDAQINDEX: ^ IXIC) is up 14% and the S&P 500 (SNPINDEX: ^ GSPC) is up 16%.
In the second quarter, Tesla produced 206,421 vehicles and delivered 201,250, up 121% from the previous year, making it its best quarter of deliveries to date. This week, according to the China Passenger Car Association, Tesla sold 33,155 Chinese-made vehicles, including those intended for export. Domestic sales in China improved, with Tesla selling 28,138 Chinese-made cars in June, up from 21,936 the month before.
So why is the market not acting accordingly?
Tesla is struck by one negative headline after another. First, “Tesla Recalls 285,000 Cars in China Due to Cruise Control Problem,” which, if you just read the headline, sounds very bad. But it wasn’t as bad as it looked. Tesla owners affected by the recall will receive a free software update, which they can have installed remotely or in person.
Second, a family has filed a wrongful death lawsuit against the company, blaming the performance of its autopilot driver assistance software for the death of a 15-year-old child, who was killed when a Tesla, possibly operating on autopilot, collided with the family’s van. It was reported that the child was in the front passenger seat and was not wearing his seat belt.
And finally, a brand new Tesla Model S Plaid spontaneously caught fire just days after delivery. While that title may sound familiar, Tesla cars are less likely to catch fire than other vehicles, and there is data to back it up. But as Tesla is making the headlines and generating a lot of web traffic, you’ll see more of it.
Numbers don’t lie
Tesla provides the following statistics:
- An accident involving a Tesla for 4.19 million miles traveled in which the drivers had engaged the autopilot.
- For those who drive without an autopilot but with active safety functions, one accident for every 2.05 million kilometers traveled.
- For those who drive without an autopilot and without active safety features, one accident for every 978,000 miles traveled.
- By comparison, the most recent data from the National Highway Traffic Safety Administration shows that in the United States, there is a car crash every 484,000 miles.
- From 2012 to 2020, there was approximately one Tesla vehicle fire for 205 million kilometers driven.
- In the United States, there is a vehicle fire for every 19 million kilometers driven.
Long story short, headlines get clicks, but Tesla’s data suggests its cars are two to nine times safer than any other car on the road. Data is Tesla’s friend, and for investors it’s a positive sign.
Watch the video below to learn more.
* The stock market prices used were the closing prices of July 7, 2021. The video was released on July 8, 2021.
10 stocks we prefer over Tesla
When our award-winning team of analysts have stock advice, it can pay off to listen. After all, the newsletter they’ve been running for over a decade, Motley Fool Equity Advisor, has tripled the market. *
They have just revealed what they believe to be the ten best stocks that investors are buying now … and Tesla was not one of them! That’s right – they think these 10 stocks are even better buys.
* The portfolio advisor returns on June 7, 2021
Neil Rozenbaum owns shares of Tesla. The Motley Fool owns shares and recommends Tesla. The Motley Fool has a disclosure policy. Neil is a subsidiary of The Motley Fool and may be remunerated for promoting its services. If you choose to subscribe via his link, he will earn extra money to support his channel. His opinions remain his own and are unaffected by The Motley Fool.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.