Please ensure Javascript is enabled for purposes of website accessibility

Tesla Model Y Deliveries Expand Beyond the U.S.

By Daniel Sparks – Jun 14, 2020 at 3:45PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The rapid rollout highlights the electric-car maker's accelerated pace of execution.

In yet another signal that Tesla (TSLA -1.10%) is getting better at manufacturing, the company's March-launched Model Y crossover is already beginning an international expansion, starting with Canada. The first deliveries of the vehicle in the market started last week. The Model Y's rollout to the country following the first U.S. deliveries of the vehicle happened much faster than the time it took the Model 3 to first make its way to Canada, highlighting the electric-car maker's accelerated pace of execution.

Here's a closer look at Tesla's progress with bringing to market its Model Y so far.

A red Model 3

Model 3. Image source: Tesla.

Canada meets Model Y

In March, Tesla impressed investors when it began deliveries of its Model Y six months ahead of its original schedule. Making the rollout even more impressive, Tesla said in its first-quarter update that its just-launched Model Y managed to contribute to profits during the period, marking the first time ever that a new Tesla product was profitable in its first quarter.

Now Tesla is achieving another important milestone for the vehicle by delivering the first units in Canada about three months after it was launched. For Tesla's Model 3, it took about six months for the first deliveries to occur outside of the United States.

It's not too surprising that the Model Y has already made its way to Canada. The company said in its first-quarter update that, thanks to a "simplified and scalable approach to manufacturing," it was able to build more Model Y vehicles in its first quarter of production than it did in the first two quarters of Model 3 production during 2017.

The Model Y represents a major growth opportunity

It's difficult to overstate the importance of the Model Y to Tesla's business. CEO Elon Musk has indicated he believes the vehicle will eventually outsell the Model 3 -- and the automaker isn't wasting any time investing heavily in the vehicle's production capacity. Tesla said it currently has the installed production tooling to produce 400,000 Model 3 and Model Y units annually on a combined basis at its Fremont Factory alone. In addition, Tesla is already building Model Y production capacity at factories in Germany and Shanghai, with deliveries of the important vehicle slated to begin in both of those markets in 2021.

Longer-term, Musk has said he estimates Model Y deliveries could grow to as much as 1.25 million units annually. Of course, this ambitious view for Model 3 is likely several years out, if it ever does materialize. Nevertheless, when viewed next to the approximately 393,000 vehicles Tesla has delivered over the trailing 12 months, it quickly becomes clear how imperative the Model Y is to the company's growth story.

Investors may want to keep an eye on any commentary management provides on the ongoing production ramp-up and delivery rollout of Model Y in future quarterly updates.

Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Tesla. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Tesla, Inc. Stock Quote
Tesla, Inc.
$265.25 (-1.10%) $-2.96

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/03/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.