Tesla Inc. (NASDAQ:TSLA) reported second-quarter deliveries of 480,126 vehicles, surpassing the company-compiled analyst consensus of 406,024 by 74,102 units, or 18.3%. However, roughly 38% of that beat—28,368 vehicles—came from drawing down inventory rather than from new production, shifting investor attention to the automotive gross margin when the company reports earnings on July 22 after the market close.
Production for the quarter totaled 451,758 vehicles, meaning Tesla delivered 28,368 more cars than it built. This drawdown reversed the trend from the first quarter, when Tesla produced 50,363 more vehicles than it delivered—the widest gap in four years, according to Reuters. Over the first half of 2026, Tesla built 860,144 vehicles and delivered 838,149, leaving a net inventory surplus of 21,995 units.
The key question for investors is how Tesla cleared that older inventory. If the company relied on discounts, low-cost financing, or other incentives, average selling prices and margins could come under pressure even if revenue rises. Tesla has cautioned that delivery numbers alone are not a reliable indicator of quarterly financial results, which also depend on pricing, cost structure, and currency fluctuations.
On Tuesday, three brokerages raised their price targets for Tesla, adding a combined $17 to their valuations. However, none changed their ratings. Deutsche Bank (ETR:DBK) maintained its Buy rating and $465 target. Morgan Stanley (NYSE:MS) analyst Andrew Percoco increased his target by $2 to $417, while Barclays (LON:BARC) analyst Dan Levy raised his by $10 to $370. Wells Fargo (NYSE:WFC) analyst Colin Langan lifted his target by $5 to $130, keeping an Underweight rating.
The average of these four targets is $393.50, barely above Tesla's Wednesday closing price of $394.46 on the Nasdaq, which fell 0.4% on the day while the S&P 500 rose 0.38%. The wide dispersion—from Deutsche Bank's 17.9% upside to Wells Fargo's 67% downside—highlights the deep uncertainty around Tesla's valuation and profitability.
Deutsche Bank's Edison Yu forecasts earnings per share of $0.36 for the quarter, below the Wall Street consensus of $0.55, citing higher input costs and promotional interest rates. Morgan Stanley's Percoco expects solid deliveries and quarterly results but only modestly raised his target.
Beyond vehicles, Tesla's energy storage deployments came in at 13.5 gigawatt-hours for the quarter, missing the company consensus of 13.8 GWh by 2.2%. The operating surprise was largely driven by the automotive segment, with some benefit from vehicles produced in prior periods.
The production-delivery gap is not a straightforward indicator of demand. Shipping schedules, model mix, and whether vehicles are moved into Tesla's own fleet all influence the numbers. A reduction in inventory could free up cash and reduce carrying costs. If pricing remained firm or factory costs declined, automotive margins could beat conservative expectations.
Looking ahead to the July 22 earnings release, investors will focus on automotive gross margin, free cash flow, and the level of inventory at quarter-end. If these metrics come in strong, the delivery beat could be seen as more than just a well-timed inventory clearance.
