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Tesla's Blowout Delivery Numbers: These Are Still Early Days

By Daniel Sparks – Jan 4, 2022 at 1:16AM

Key Points

  • Tesla's fourth-quarter deliveries were up 71% year over year.
  • Model S and X deliveries are picking up steam again.
  • There's good reason to believe Tesla's deliveries could grow around 50% in 2022.

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The electric-car maker's momentum is staggering, helping justify the stock's premium valuation.

Tesla (TSLA 0.56%) shares surged on Monday, following the company's announcement of huge fourth-quarter vehicle delivery numbers. Delivering over 45,000 more vehicles than the consensus analyst estimate called for, the company is on a roll. Not only does this highlight the company's staggering momentum in Q4 but the company's production momentum bodes well for Tesla's potential in 2022 and beyond.

As investors digest this news, here's a closer look at why investors are so excited about these better-than-expected quarterly delivery numbers.

Tesla Model X interior

Tesla Model X's overhauled interior. Image source: Tesla.

Total 2021 deliveries nearly doubled

Tesla's approximately 308,600 deliveries in its fourth quarter marked a blockbuster achievement for the company. But what really captures the company's impressive momentum is its total deliveries in 2021. For the full year, Tesla delivered over 936,000 vehicles -- up 87% from the nearly 500,000 units the company delivered last year.

Tesla's annualized production run rate exceeds 1 million

Also worth noting is the production rate the company finished the year at. Based on the 305,840 vehicles Tesla produced during the fourth quarter of 2021, it is building cars at an annualized run rate of more than 1.22 million, setting the company up well for more strong growth in 2022.

Model S and X deliveries are increasing again

Another detail worth highlighting in the quarter was the sequential increase in Model S and X deliveries. Tesla delivered a total of 11,750 Model S and X vehicles -- up from 9,289 last quarter. While these delivery numbers pale in comparison to the 296,850 Model 3 and Model Y deliveries during the quarter, the sequential growth is a good sign that Tesla's recent refresh to its more expensive Model S and X models is paying off.

In Tesla's third-quarter earnings call in October, Tesla CFO Kirkhorn said that recent demand trends for the two vehicles indicate that the company will eventually increase production of the pricey models to the point that it exceeds historical levels. At the two models' peak production level, total quarterly Model S and X deliveries exceeded 28,000; so Tesla still has a long way to go to achieve this target.

Production could soar further as new factories come online

With 2022 underway, investors should expect Tesla's vehicle production rates to continue improving. The company is starting to bring online new factories in both Germany and Texas. While it will take time to ramp up production at these new factories, they could eventually come close to doubling Tesla's production capacity.

Tesla management believes it can average 50% annualized growth in deliveries over a multi-year horizon. Based on the company's sales momentum and its recent construction of new factories, management is probably right.

All of this to say, it's not surprising that Tesla shares surged on the news of a blowout fourth quarter. This company's staggering fourth-quarter deliveries confirm that Tesla is still early on in its growth story.

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

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