Tesla shares rally after lower-than-expected sales drop

The news: Shares in Tesla have rallied to their highest level in six months after the electric car maker reported a smaller-than-expected drop in vehicle deliveries in the second quarter.

The numbers: Tesla delivered 443,956 vehicles in the three months to 30 June, down 4.8% from a year earlier but up 14.8% from the preceding quarter. Analysts, on average, had expected the company to deliver 438,019 vehicles.

Shares in the company jumped more than 10% to USD231.26 ($346.72) each.

The context: The electric vehicle maker's price cuts and incentives helped mitigate cooling demand. Tesla has been slow to refresh its car lineup at a time when rivals, especially in China, have come up with new affordable models, and as high interest rates dampen demand.

The company’s China sales, which include domestic sales and exports to Europe and other countries, fell 17% in the second quarter from a year earlier. Sales were also weak in Europe, down 36% in May alone, due to waning EV subsidies and poor demand from fleet operators, who accounted for nearly half its sales in the region last year.