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Tesla Is About to Report Q2 Deliveries -- Here's What to Look For

By Daniel Sparks – Updated Jul 1, 2020 at 12:52PM

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With the electric-car maker's shares up more than 400% over the past 12 months, expectations are high going into its vehicle production and deliveries update.

Electric-car maker Tesla (TSLA -1.10%) just wrapped up its second quarter of 2020 and is scheduled to report its vehicle deliveries for the period this week. The update will provide investors a timely view into a quarter that was heavily damaged by coronavirus-related factory shutdowns.

Investors will be watching the update closely, as it follows a huge run-up in the automaker's stock price. Shares of the growth stock hit an all-time high this week and are up more than 400% over the past 12 months and 170% year to date. This obviously crushes the S&P 500's 4% decline during 2020.

Tesla's factory in Fremont, California.

Tesla factory. Image source: The Motley Fool.

Second-quarter vehicle delivery estimate

In a note to clients on Wednesday morning, Wedbush analyst Daniel Ives expressed optimism for Tesla's second-quarter vehicle delivery numbers, noting that he has observed a "strong bounce back" in deliveries in the U.S. and Europe during June as global economies have started to reopen. More importantly, he believes there's significant demand for Tesla vehicles in China, where the company has a Shanghai-based factory to make Model 3 vehicles specifically for the important market.

Given these recent trends, Ives predicts Tesla will deliver 85,000 to 90,000 vehicles during Q2. Even the low end of this forecast would help Tesla break even as far as profitability goes, Ives estimates. This would be an impressive feat during a quarter in which the company had to pause production at its U.S. factories and then ramp back up to normal operations when they were allowed to resume.

Putting growth on hold

If Tesla's second-quarter vehicle deliveries do come in within Ives' predicted range, the midpoint (87,500) implies a substantial year-over-year decline. The automaker delivered 95,356 vehicles in the second quarter of 2019. However, 87,500 units wouldn't be much lower than Tesla's 88,496 deliveries in the first quarter of 2020.

Looking beyond Q2, of course, investors will be hoping for Tesla to return to both year-over-year and sequential growth. Year-over-year comparisons in the second half of the year will benefit from the addition of China-based Model 3 production and Model Y production in the U.S. The company didn't start producing these vehicles until the end of 2019 and the first quarter of 2020, respectively.

Given the uncertain backdrop related to the coronavirus outbreak and factory shutdowns when Tesla reported its first-quarter results, the company refrained from providing a specific full-year forecast for vehicle deliveries. But management did say it had the production capacity installed to exceed 500,000 vehicle deliveries in 2020, adding the caveat that "it remains uncertain how quickly we and our suppliers will be able to ramp production after resuming operations."

Investors will get a better idea of whether Tesla is on pace to deliver more than 500,000 vehicles this year when the company reports its second-quarter deliveries. Tesla typically releases its quarterly deliveries sometime between the first and third day following quarter close. That makes an update from Tesla likely anytime from July 1 to July 3.

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.

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