Tesla Deliveries Reach Record Quarter
Tesla Inc. returned to growth mode in the second quarter, setting a record for deliveries and beating Wall Street’s expectations, relieving some pressure on Chief Executive Elon Musk to prove that demand remains strong for the electric-car maker’s vehicles.
The Silicon Valley auto maker delivered a total of 95,200 vehicles in the three months that ended June 30, a sharp increase from a year ago as the company worked to boost production. Analysts surveyed by FactSet on average expected total deliveries of 90,680. The previous record was 90,700 in 2018’s fourth quarter.
Tesla also said on Tuesday that the total includes deliveries of 77,550 Model 3 compact cars, beating the 74,100 expected by analysts. The company didn’t mention its full-year target of delivering between 360,000 and 400,000 vehicles globally.
It’s much needed good news for Tesla. First-quarter losses had hit $702 million and vehicle sales fell 41% to $3.72 billion over the prior quarter, as Model S and Model X sales nosedived. Tesla cited the loss of federal tax subsidies in the US and difficulties delivering vehicles overseas. Its latest deliveries’ report suggested the company had streamlined global logistics and delivery operations and also cut costs.
The launches of both the Model X SUV and Model 3 sedan came with initial sky-house expectations followed by months delays and disappointments as Tesla entered “production hell.” With the unexpected success of its recent products, Tesla has convinced lenders to fund their next expansion phase. Tesla appears to have ironed out manufacturing issues and stabilized production. Of course, Tesla never stays steady for long. Musk pushes so many new products out the door—the Model Y crossover, a pickup truck, the Semi tractor-trailer, energy-storage products and more in the next two years— the cycle simply repeats again.
Will that be enough to put Tesla back into the black? Musk has said despite losing money for the first half of this year—after forecasting profitable quarters as far as the eye can see in 2018—he expects Tesla to return to profitability by the end of this year.