Electric-car maker’s shares Tesla (NASDAQ: TSLA) This year has increased. While this has been great for shareholders, it means that expectations are high. This is particularly true for the automaker’s third-quarter delivery, which Tesla will report in the next few days. Can the automaker meet the market’s high expectations?
Investors will return to quarterly deliveries of Tesla in the second quarter for meaningful year-over-year growth in the second quarter. Although Tesla’s delivery expectations in the second quarter were much better than analysts expected, they were down 5% year-over-year. The electric-car company’s factory in Fremont remained closed for nearly half a quarter, with total deliveries during the period.
How many vehicles will Tesla deliver?
In the third quarter of 2019, the automaker delivered approximately 97,000 vehicles. This figure had increased by 16% year-on-year. To report year-over-year growth in the third quarter of 2020, Tesla would require a meaningful sequential uptake from a suppressed Q2 volume volume. In the second quarter of 2020, Tesla delivered approximately 91,000 vehicles. There are several reasons, however, that Tesla’s Q3 will increase year-over-year.
First, if Tesla was able to deliver 91,000 vehicles in Q2, with its main factory closed for more than half the quarter, it should be fairly easy to get more than 97,000 deliveries in Q3.
Second, Tesla has another vehicle this year. In March, Tesla began shipping its new Model Y SUV. Model Y’s contribution to delivery volume in Q3 was significant, as Tesla said that the Model Y exit of its second quarter with production of Model Y operating at full capacity of the production line. Although Tesla did not say exactly what the installed production capacity of its Model Y production line is, the automaker noted in its second-quarter update that the combined Model 3 and Model Y production capacity at the Tesla factory in Faymont, California, was 400,000. Is the unit. Per year.
What does this mean for Tesla’s potential delivery during the quarter? Quarterly quarterly deliveries – more than 112,000 of the company’s all-time high quarterly deliveries in the fourth quarter of 2019 – also appear to be within reach in Q3.
The bigger picture
For the full year, Tesla is targeting 500,000 total deliveries, up from about 368,000 last year. With around 179,000 vehicles delivered in the first half of the year, Tesla will need a very strong finish by 2020 to hit this guidance.
If Tesla’s third-quarter deliveries are impressive enough to meet the automaker’s target of 500,000 units by 2020, the company could likely meet investors’ high expectations. One and a half million deliveries mean a 36% year-on-year increase in 2020, highlighting how ambitious this goal is (especially in a year in which coronovirus has proved to be a major setback).
Tesla typically reports its quarterly delivery within three days of the end of each quarter. Therefore, management likely will not report the automaker’s third-quarter delivery on 3 October.