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Tesla's Vehicle Deliveries Soar

By Daniel Sparks - Jul 2, 2019 at 9:02PM

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The electric-car maker's record deliveries highlight Tesla's skyrocketing Model 3 sales.

Tesla's ( TSLA -4.35% ) second-quarter vehicle production and delivery update is out -- and investors are impressed based on the stock's sharp 7% jump in after-hours trading as of 6:40 p.m. EDT Tuesday. Deliveries during the quarter surged to a record high, driven primarily by a huge increase in Model 3 deliveries.

The upbeat update on Tesla's vehicle sales follows worse-than-expected first-quarter deliveries, when the company's overseas expansion led to logistical challenges.

Tesla's Model S, 3, X, and Y with mountains behind them.

Image source: Tesla.

Second-quarter production and deliveries

Tesla delivered a record 95,200 vehicles in its second quarter. Fueled by continued growth in Model 3 production, this figure was up 134% year over year and 51% sequentially. These deliveries easily beat analysts' average forecast for deliveries of 91,000 units during the quarter. In addition, the figure was ahead of Tesla's previous quarterly record of about 90,966 vehicles. 

Of these deliveries, Tesla estimates 77,550 were Model 3 and 17,650 were Model S and X vehicles.

Vehicle

Q2 2019

Q2 2018

Change

Model 3 deliveries

77,550

18,449

320%

Combined Model S & X deliveries

17,650

22,319

(21%)

Total vehicle deliveries

95,200

40,768

134%

Deliveries are Tesla's end-of-quarter estimates and final figures can vary by around 0.5%, according to Tesla. Data source: Tesla's quarterly vehicle delivery updates and shareholder letters.

Capturing where growth came from during the quarter, Model 3 deliveries soared 320% as the vehicle's production jumped. In the year-ago quarter, Tesla was still in "production hell," with production running about six months behind schedule. But now Tesla was able to produce 72,531 Model 3 units in its second quarter alone, setting the stage for a huge year-over-year increase in Model 3 deliveries.

A bar chart showing Tesla's quarterly vehicle deliveries by model.

Data source: Tesla's quarterly deliveries updates and shareholder letters. Chart by author.

Looking beyond Model 3 deliveries, it's worth noting that even though Model S and X deliveries were down 21% year over year, they were up 46% sequentially. This suggests that demand for the pricey vehicles is improving after a pull-forward of demand during the fourth quarter of 2018 (due to the halving of the federal electric vehicle tax credit at the end of last year) negatively impacted S and X deliveries in the first quarter of 2019.

Demand remains robust

Perhaps one of the most important takeaways in Tesla's update on Tuesday was regarding the demand for Tesla's vehicles.

"Orders generated during the quarter exceeded our deliveries, thus we are entering Q3 with an increase in our order backlog," Tesla stated. "We believe we are well positioned to continue growing total production and deliveries in Q3."

Tesla's better-than-expected second-quarter deliveries and management's optimistic update on demand for its vehicles bode well for the automaker's ability to meet its full-year guidance for 360,000 to 400,000 total deliveries.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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