With electric-car maker Tesla Motors' (NASDAQ:TSLA) second quarter coming to a close at the end of June, investors will soon get an update on the automaker's vehicle deliveries. With the Model S expected to represent more than half of the deliveries during the quarter, the 2012-introduced sedan will be the biggest driver of the company's revenue. How many of the Model S, therefore, could Tesla have delivered during the quarter?
What to expect from Tesla's Q2 Model S deliveries
The best preview we have of what to expect from Tesla's Model S deliveries is management's note in its first-quarter shareholder letter, saying orders for Model S during the quarter were up 45% from the year-ago quarter. This gives some insight into what to expect for Q2 Model S deliveries since there's undoubtedly some correlation between one quarter's orders with the following quarter's deliveries. Since it takes around a month and a half for Tesla to deliver a customer's Model S order in the U.S., and an even longer time for overseas orders, the level of orders for the Model S somewhat foretells where deliveries are headed.
Assuming, therefore, that last year's second-quarter Model S deliveries are roughly representative of last year's first-quarter orders, 45% year-over-year growth in first-quarter Model S orders would mean Q2 Model S deliveries increase by about 45% compared with the year-ago quarter.
These assumptions would suggest Tesla could deliver around 16,700 vehicles during the quarter.
But there's more information to consider before settling on 16,700 units as a best estimate for Model S deliveries in Q2. Investors should keep in mind that this quarter will include an unusually "large number of vehicles in transit to customers in Europe and Asia at the end of the quarter," Tesla said in its first-quarter shareholder letter. This means Tesla may not be able to deliver as high of a percentage of the vehicles it produces during the quarter as usual. With this tidbit in mind, a safer estimate for second-quarter Model S deliveries would be closer to 15,000.
Supporting expected year-over-year growth in Model S sales during Q2, demand for the Model S should be no problem. The company gave the Model S some fresh design changes in April, including "the largest set of hardware changes (nearly 300 part changes in total) on Model S to date," with the most major update being a redesigned nose cone. Further, Tesla has emphasized that its March 31 Model 3 unveil has stimulated demand for its vehicles. The impact of this launch, therefore, wasn't yet baked into the 45% year-over-year increase in Q1 orders for the Model S Tesla cited.
Could the Model S help Tesla crush its own guidance?
If Tesla does deliver 15,000 Model S units, it would likely be positioned to easily outperform its guidance for 17,000 second-quarter total vehicle deliveries, when combining both its Model S and Model X, by a meaningful margin. Since Tesla expected Model X production to continue ramping up rapidly during Q2, and Tesla delivered 2,400 during Q1, 3,000 or more Model X deliveries during Q2 would put total vehicle deliveries at 18,000 or higher -- a record high, and well above Tesla's guidance for 17,000.
Tesla announces quarterly deliveries within three days of the quarter's close. For Q2, therefore, Tesla should report quarterly deliveries sometime between July 1 and July 3.