When Tesla (NASDAQ:TSLA) first started 2020, the electric car company told investors it expected to deliver 500,000 vehicles or more this year. Of course, this guidance came before Tesla knew a global pandemic would hit -- one that would lead to a pause in production at its factories and weakened demand around the world for new cars. As Tesla faced these challenging times earlier this year, management pulled its forecast for half a million deliveries.

Yet here we are at the end of 2020, and Tesla is announcing that it basically achieved its initial pre-pandemic target. The company delivered 499,550 vehicles in 2020, up from about 368,000 in 2019.

Tesla's Model S, X, 3, and Y

Model S, X, 3, and Y. Image source: Tesla.

Staggering growth

Tesla's record fourth quarter deliveries highlight an impressive growth trajectory for the automaker. Full-year 2020 deliveries rose 36% year over year. Even more, fourth quarter deliveries were up 61% year over year and 29% sequentially. 

While Tesla did eventually reinstate its target for 500,000 deliveries after a strong second quarter, management made it clear at the time that achieving this goal wasn't in the bag. Even in Tesla's third quarter shareholder letter, management was still saying that hitting its target would be "difficult." It would depend "primarily on quarter over quarter increases in Model Y and Shanghai production, as well as further improvements in logistics and delivery efficiency at higher volume levels."

While Tesla's 499,550 vehicle deliveries technically fall just shy of its 500,000 target, they are close enough to highlight Tesla's staggering growth and to suggest that the electric car maker was able to achieve some of the improvements in logistics and delivery efficiency at higher volumes that it was aiming for.

How Tesla got to half a million deliveries

Tesla's achievement of nearly half a million vehicle deliveries in 2020 was fueled primarily by continued growth in sales of its lower-priced models. Combined Model 3 and Y deliveries in 2020 were 442,511, or about 85% of total deliveries. The remaining deliveries were Model S and X vehicles -- the company's flagship sedan and SUV.

For the fourth quarter specifically, combined Model 3 and Y deliveries were 161,650, or about 90% of deliveries. Combined Model S and X deliveries were 18,920.

Though Tesla doesn't break down its Model 3 and Y deliveries by model, Model Y likely played an integral role in the company's growth this year. Tesla has been very optimistic about the new vehicle, with management implying that the small SUV's production and delivery volumes have the potential to ramp up enough to exceed Tesla's best-selling car: Model 3.

Model Y. Image source: Tesla.

A person driving a blue Tesla Model Y. 

Tesla is certainly investing heavily in Model Y production. As of Tesla's third quarter shareholder letter, the company had a Model Y production line at its factory in Fremont, California, and it had more production lines for the vehicle under construction at three other factories.

In 2021, investors are likely expecting another year of sharp growth in vehicle deliveries from Tesla. The company has been aggressively expanding its vehicle production capacity, setting up the auto manufacturer well for continued robust growth throughout the year.