Tesla 

Tesla (TSLA) fell by almost 7 percent today after the company reported second-quarter deliveries, bringing the total for the first half of 2017 to around 47,100, on the low end of the company’s guidance.

TSLA Price data by YCharts

Behind the fall was news of a call from Goldman that Model S & X production has stalled out around 24,000 cars per quarter.

Kind of hard to say it stalled, with the company showing some solid growth rates year-over-year.

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Tesla’s Competition

Additionally, Tesla delivered in one-quarter, what Porsche North America’s total production in 2017 has been, which is about 27,000 cars.

Model	June Sales		Year-to-Date
	2017	2016	2017	2016
ALL 911	686	852	4,395	5,027
ALL BOXSTER/CAYMAN	431	687	2,474	3,362
ALL PANAMERA	518	506	3,001	2,198
ALL CAYENNE	1,010	1,215	7,060	7,991
ALL MACAN	1,871	1,222	10,638	8,129
GRAND TOTALS*	4,516	4,482	27,568	26,708
*918 Spyder sales are reflected in 2016 grand total figures.

Porsche PR

Then, of course, you can compare that to Audi’s America’s A6, A7, and A8 which year to date have deliveries of a total of 11,860, which is down from nearly 11 percent from a year ago.

AUDI US SNAPSHOT	–MTD–			–YTD–
Model Line	June ’17 Actual	June ’16 Actual	Yr/Yr % change	June ’17 YTD Actual	June ’16 YTD Actual	Yr/Yr % change
A3	1,904	2,818	-32.4%	10,417	14,642	-28.8%
A3 e-tron	324	353	-8.2%	2,120	1,942	9.2%
A4	3,022	2,802	7.9%	17,269	14,919	15.8%
A5	2,374	802	196%	6,739	4,334	55.5%
A6	1,425	1,690	-15.7%	7,969	8,328	-4.3%
A7	224	487	-54%	2,290	3,056	-25.1%
A8	301	303	-0.7%	1,601	1,941	-17.5%
allroad	251	134	87.3%	1,383	837	65.2%
Q3	1,741	1,719	1.3%	9,086	8,468	7.3%
Q5	4,498	4,419	1.8%	25,747	21,986	17.1%
Q7	3,114	2,613	19.2%	16,732	14,741	13.5%
R8	75	72	4.2%	481	262	83.6%
TT	163	233	-30%	1,137	1,478	-23.1%
Total Audi Sales	19,416	18,445	5.3%	102,971	96,934	6.2%
Total CPO Sales	3,290	3,842	-14.4%	22,236	23,064	-3.6%

Audi PR

BMW is seeing the same with North American Sales of its 7 series down by 24 for 2017 YTD, its 6 series down 21.1 percent year to date, and the 5 series down 13 percent year to date.

Say what you want about Tesla quarterly deliveries, the company seems to be doing something right, in what looks like a challenging luxury market.  These companies like it or not, are currently Tesla’s peer group.

Tesla Production

Tesla has said it will update guidance for the second half closer to the official launch of the Model 3. Based on the current production the company has already done this year, and what Tesla has said so far regarding the model 3, 140-150k cars in 2017 seems do-able, in my opinion. The big focus will be on how much production the company ramps up for the Model 3, and of course any news on the Model Y.

Interestingly today, Volvo also said it would it would begin to phase out combustion engines and offer only hybrid or electric starting 2019.

Additionally, as Tesla ramps up production and the Gigafactory starts running to full functionality, my expectation is for the cost of the battery to be reduced over time. Thus helping to increase the company’s profitably.

Biotech

Biotech moved higher again, after last week’s retracement. The Biotech SPDR (XBI) jumped roughly 1.66 percent, outpacing the Technology (XLK) and the Nasdaq (QQQ). Shares of Energy Stocks fell on the day with the Energy SPDR ETF (XLE) down by nearly 2 percent.

XBI Price data by YCharts

Biotech is now the leading sector once again in 2017, with the XBI up nearly 34 percent.

XBI data by YCharts

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Disclaimer:

Michael Kramer and the clients of Mott Capital own shares of Tesla (TSLA)

Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendation made during the past twelve months. Past performance is not indicative of future performance.

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