Though Tesla's (TSLA -6.42%) stock has come down recently, shares are still up nearly 700% since the beginning of 2020. In order to keep investors excited about the electric-car company's future, therefore, Tesla has to keep demonstrating its ability to grow quickly. After all, the growth stock is priced for rapidly rising sales not just this year but for years to come.
Fortunately, Tesla's just-released first-quarter vehicle deliveries report didn't disappoint. Not only did the automaker report higher deliveries than in any quarter yet, but it handily surpassed analysts' expectations.
A record Q1
Tesla managed to deliver approximately 184,800 vehicles in the first quarter of 2021, up 109% year over year and 2% sequentially.
Almost all of its deliveries were either its Model 3 or its Model Y, the company's two more-affordable vehicles. Model S and X deliveries nearly came to a halt, as Tesla introduced new versions of the vehicles and production of them is still in the beginning stages.
Tesla delivered 182,780 Model 3 and Y vehicles combined, translating into 140% year-over-year growth. Combined Model S and X deliveries of 2,020, however, were down from more than 12,000 S and X deliveries in the year-ago period.
The Model Y was likely the primary catalyst for Tesla's vehicle sales growth during the quarter. Tesla started producing its Model Y for the first time at its factory in China during the fourth quarter of 2020.
"We are encouraged by the strong reception of the Model Y in China and are quickly progressing to full production capacity," management said in Tesla's first-quarter deliveries update.
Furthermore, even though Model S and X deliveries were down sharply, Tesla had good news regarding the two important flagship vehicles. "The new Model S and Model X have also been exceptionally well received," the company said, "with the new equipment installed and tested in Q1 and we are in the early stages of ramping production."
Analysts, on average, were expecting total quarterly deliveries closer to 170,000.
Just getting started
While Tesla's Q1 deliveries were impressive, they'll only climb higher in the coming quarters if the company executes according to plan. In Tesla's Q4 update earlier this year, management said it expects to deliver more than 750,000 vehicles in 2021. To achieve this, the automaker will need to average nearly 188,000 deliveries per quarter.
Though it's always possible that Tesla could run into some unexpected challenges, such a strong first quarter suggests the company can easily hit its guidance this year. The addition of Model Y production at its factory in Shanghai and the expected contribution from new production lines in Germany and Texas later in 2021 should provide more than enough production capacity for Tesla to surpass its guidance.