With the first day of winter here, it's a good reminder of how close we are to many publicly traded companies closing out their fourth calendar quarters. For Tesla (TSLA 3.11%), these last 10 days will be important, as they'll help determine how many electric vehicles the company delivers during the final quarter of the year.
Expectations for the quarter are high. Tesla has seen massive growth in vehicle deliveries recently and its production capacity has increased throughout the year, despite global supply and logistics challenges related to the pandemic. Investors are likely expecting the company's momentum to continue even as it faces these challenges.
But nothing is in the bag yet.
What Tesla guided for
While Tesla doesn't provide quarterly guidance, investors can extrapolate a forecast from the company's full-year guide. At the beginning of the year, Tesla said it expected to grow deliveries 50% or more compared to the approximately 500,000 deliveries it achieved in 2020. This implies full-year deliveries of more than 750,000. With 627,521 vehicles already delivered, Tesla only needs to deliver 122,428 vehicles or more in its fourth quarter to hit its full-year guidance.
But Tesla's fourth-quarter deliveries will likely come in much higher than this. After all, Tesla delivered over 241,000 vehicles in third quarter of 2021. With sequential growth in Tesla's quarterly deliveries for six quarters in a row, it's unlikely that Tesla's fourth-quarter deliveries would fall sharply sequentially in Q4.
Looking beyond Tesla's full-year guidance as an indicator of what could happen in Q4, there's good evidence in the automaker's fourth-quarter earnings call that deliveries could increase sequentially again in Q4. The automaker was "able to achieve an annualized production run rate of over 1 million cars toward the end of the quarter," said Tesla CFO Zach Kirkhorn in the company's third-quarter earnings call. "The increase in production rate has primarily been driven by further ramping of the Model Y at our Shanghai factory."
So fourth-quarter deliveries of somewhere around 250,000 seems likely based on Kirkhorn's comments.
A wildcard quarter
But nothing is certain. These are unusual times with unusual supply, production, and logistical constraints. Considering these challenges and Tesla's recent impressive execution in expanding its manufacturing capacity, the range of outcomes in Q4 is extremely wide.
Investors will get answers when Tesla reports its fourth-quarter deliveries. The automaker usually reports deliveries for the period sometime between Jan. 1 and Jan. 3. So keep an eye out for official numbers from the company then.