Tesla Inc (NASDAQ:TSLA) and Rivian Automotive Inc (NASDAQ:RIVN)'s latest delivery numbers show electric vehicle (EV) sales are down but not out, Bank of America analysts believe.
Rivian reported Q2 deliveries of 13,790, 24% higher than the consensus estimate, while Tesla beat the consensus by 1% at 437,812 vehicles delivered.
Model 3/Y deliveries of 422,405 were 7% higher than expected while Model S/X/Cybertruck deliveries of 21,551 were 29% below estimates.
“There have been increasing concerns that electric vehicle (EV) sales would remain stagnant, but both Tesla and Rivian sales showed there are some signs of life,” the bank’s analysts wrote in a note to clients.
“In addition, the increasing number of more affordable offerings this year and going forward should drive EV volumes higher. However, we continue to expect a grind higher until cost parity (without incentives) is reached around the end of decade.”
The analysts also raised their price target on Tesla from $220 to $260 on better deliveries and their thesis the stock can move higher with a positive catalyst path. They reiterated their ‘Buy’ rating.
Shares of Tesla closed up 6.5% at about $246 on Wednesday.