Tesla US Sales Jump 73% In May, Morgan Stanley Says

The Tesla Model 3 on display in Los Angeles, California. The popular Model 3s have driven more than 1 billion electric miles in record time. FREDERIC J. BROWN/AFP/Getty Images

For all the financial and production baggage weighing it down, Tesla Inc. remains far and wide the United States’ leader in the race to produce electric vehicles (EVs).

Morgan Stanley said Tesla continued “to extend its lead vs. a still-small group of true (EV) competitors” during April and May. It pointed out Tesla’s estimated total U.S. sales of 11,300 vehicles in May alone was 2.6 times the combined total of its competitors, which is an increase from 2.1 times in 2018.

Tesla’s total U.S. sales in May skyrocketed by 73 percent year-on-year, according to data from Motor Intelligence, the the web analytics system of Autodata Corporation. On the other hand, sales rose 39 percent for EVs from Audi, BMW, Jaguar, Chevrolet and Nissan.

Not bad for Tesla, which began 2019 with delivery numbers far below analysts’ expectations.

Morgan Stanley forecasts Tesla will deliver from 360,000 and 400,000 EVs this year. This total represents “an increase of approximately 45% to 65% compared to 2018,” said Morgan Stanley analyst Adam Jonas.

Investment bank JMP Securities LLC was also upbeat about Tesla’s production numbers. It noted that “More Model 3s were registered in April and May than during all of the first quarter.”

JMP also updated its estimates for Tesla second quarter and for 2020.

“It is evident that Tesla’s Q2 volume should recover significantly from Q1,” said analysts Joseph Osha and Hilary Cauley in a note to investors. JMP also increased its estimate for Model 3 deliveries for 2019.

On the other hand, JMP decreased its estimate for Tesla’s total 2019 deliveries “very slightly to 378,900 units from 379,600.” It pointed to steadily increasing volume in the lower priced Model 3 along with slightly weaker sales in the higher end Model S and Model X vehicles for this downbeat view.

Morgan Stanley has an equal weight rating on Tesla shares with a price target of $193.60. In contrast, JMP has a market outperform rating. It also lowered its price target on Tesla to $347 a share from $369 a share.

Tesla shares are currently trading below $200 compared to its $300-plus share price at the start of 2019. Tesla is down 42 percent for the year and has fallen so far from its record high in September 2017 it’s now a good buy, according to some analysts.