Tesla records record quarter
EV sales outpace rival automakers
Tesla saw a record quarter for deliveries, the company said early July, alleviating the worst fears about demand for the Elon Musk-led company’s electric vehicles.
The Model 3 maker handed over 95,200 cars to customers in the three months that ended in June, exceeding the previous best mark set in the last quarter of 2018. Tesla’s delivery count exceeded all but one analyst’s estimate in a Bloomberg News survey.
While the results go a long way toward contradicting Tesla’s doubters, it remains to be seen whether this level of demand is sustainable — or profitable. The US$3,750 U.S. federal tax credit buyers were eligible for was cut by half beginning July 1, and deliveries tailed off the last time the incentive shrank. Musk also has said the company will post a loss for the quarter, then report positive earnings in the second half.
Tesla also left out of its statement any mention of its fullyear forecast for 360,000 to 400,000 deliveries, a projection it reaffirmed in its release a quarter ago. Tesla representatives didn’t respond when asked whether the company is sticking with its guidance. It will have to average more than 100,000 units per quarter in the second half to reach the low end of the range.
Musk, 48, urged employees to “go all out” in the final days of Tesla’s first full quarter in which Model 3s made their way to buyers in Europe and China. Overseas demand contributed to deliveries of the sedan jumping to 77,550 units, more than all the vehicles Tesla handed over in the first quarter.
“The big picture is that something is happening around electric vehicles,” said Gene Munster, a managing partner of venture capital firm Loup Ventures and longtime Tesla bull. “The Model 3 is on fire.”
Several analysts raised their delivery estimates as the quarter came to an end, citing brisk sales to key European markets, including Norway and the Netherlands, as well as the effect of incentives that Canada began offering in May to stoke purchases of battery-powered cars. Tesla doesn’t break down deliveries by region in its release.
One reason Wall Street remains concerned about Tesla’s profitability is shrinking demand for the higher-margin Model S and Model X. Combined deliveries dropped to 17,650 in the quarter, down more than 20 per cent from a year ago.
Tesla said orders exceeded deliveries during the quarter and it expects to boost production and hand over more cars in the next three months.
Tesla’s Model 3 sales are far outpacing rivals. General Motors sold just 3,965 of its all-electric Chevrolet Bolt in the second quarter, while Volkswagen’s Audi delivered just 1,835 battery-powered E-tron SUVS.