Tesla shrugs off Model 3 demand concerns with record delivery numbers

Jeannie Matthews
July 4, 2019

With 77,500 units delivered, Tesla's Model 3 accounted for the bulk of these numbers.

Moving more metal won't solve all of Tesla's challenges.

"We believe we are well positioned to continue growing total production and deliveries in Q3", the company said in a statement.

Over the past couple of weeks, Tesla chief executive Elon Musk has been feverously touting the possibility of April-June 2019 being its most prolific quarter to date.

Tuesday's numbers helped take the sting off a hard first quarter, in which deliveries plunged and the company lost $702 million. Osha has a $347 price target on Tesla.

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Garrett Nelson of CFRA Research noted that second-quarter deliveries were likely artificially boosted by customers pulling forward their vehicle purchases before the July 1 tax credit cut, warning that could result in a "significant retracement" in deliveries in the third quarter.

"That's the quarter where deliveries plunged - because of that Tesla had a 700 million dollar loss". Ahead of the report, Barclays analyst Brian Johnson, long a Tesla bear, upped his delivery estimates to 85,000 from 75,000, still well under the total reported by the company on Tuesday. It will have to average more than 100,000 units per quarter in the second half to reach the low end of the range.

In prior quarters, Tesla has diverted employees from all parts of the company to help with deliveries in an all-hands-on-deck effort to meet delivery goals.

Earlier in June, it was revealed that the EV company has not yet met Musk's 2019 Q2 goal. According to the automaker, it produced 87,048 vehicles during Q2 2019 and shipped around 95,200 vehicles during the same quarter. Investors are concerned the cheaper Model 3 is cannibalizing demand for the higher-margin Model S and X and dragging on profitability. In the first quarter it delivered a disappointing 63,000 cars as the company faced logistical problems transporting vehicles to customers outside the USA, and the company's share price is now 26pc below where it started the year. General Motors Co. sold just 3,965 of its all-electric Chevrolet Bolt in the second quarter, while Volkswagen AG's Audi delivered just 1,835 battery-powered E-Tron SUVs.

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