Shares of Tesla (TSLA -3.55%) fell in after-hours trading on Wednesday, following the release of the electric-car maker's third-quarter delivery and production numbers. While there were more vehicles produced and delivered than in any quarter in the company's history, the company ultimately fell short of analysts' consensus forecast for the period.
Here's a look at the third-quarter delivery and production numbers, as well as what management said about demand for its vehicles.
Tesla Model S, Model 3, and Model X. Image source: Tesla.
Record deliveries and growing demand
Tesla's third-quarter deliveries rose 16% year over year to a record high of 97,000. This is up 2% sequentially from 95,356 deliveries in the company's second quarter.
|
Vehicle |
Q3 2019 |
Q3 2018 |
Change |
|---|---|---|---|
|
Model 3 |
79,600 |
56,065 |
42% |
|
Model S and Model X |
17,400 |
27,710 |
(37%) |
|
Total |
97,000 |
83,775 |
16% |
Data source: Tesla's third-quarter update on deliveries.
Of these deliveries, 79,600 were Model 3 and 17,400 were either Model S or Model X. Model 3 deliveries, up 42% year over year, continued their sharp upward climb during the quarter. But combined Model S and X deliveries continue to sell at suppressed levels compared to 2018, declining 37% year over year. Sequentially, Model 3 deliveries increased 3% and combined Model S and X deliveries fell 2%.
Importantly, Tesla's production rate continued to improve. The automaker produced a record 96,155 vehicles during the quarter, up from 87,048 in Q2.
Tesla also confirmed that demand for its vehicles remains robust, as the company once again ended the quarter with an increase in order backlog. Further, Tesla said it continues to attract new customers.
"As was also the case in Q2, nearly all of our Model 3 orders were received from customers who did not previously hold a reservation, solidifying the transition to generating strong organic demand," Tesla explained in its update on Wednesday.
Looking ahead, the company said it will focus on further improving production in order to meet growing demand.
Why the Street is disappointed
Though deliveries were up both year over year and sequentially, they ultimately fell short of analysts' consensus forecast for about 99,000 deliveries. Further, disappointment may have been magnified by a recently leaked email from Tesla CEO Elon Musk telling employees that a quarter of 100,000 deliveries was within reach but would require "rallying" the company's resources and a strong effort from employees. This may have led many investors to believe deliveries during the period would be closer to 100,000 than they were.
Nevertheless, the delivery figures from the quarter were big enough to put Tesla's full-year guidance for 360,000 to 400,00 deliveries within reach. To hit the low end of its guidance, Tesla will need to deliver about 105,000 vehicles during its fourth quarter. Given that Tesla's deliveries typically rise sequentially during Q4, hitting the low end of this guidance range seems possible.
Hitting the high end of this guidance range, however, would likely require some contribution from the company's new factory in Shanghai, which is expected to start production before the end of the year. It's unclear whether or not production at the factory will start early enough for Tesla to record any deliveries of vehicles made at the Shanghai factory during 2019.
