Tesla Model 3
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Tesla shares surged Tuesday after the electric auto maker said it shattered its previous production and delivery records during the second quarter, soundly beating analysts estimates.
The company’s stock jumped by about 8% in after-market trading. Tesla also hinted at a strong third quarter, saying it’s entering the third quarter with a backlog of orders.
CEO Elon Musk set investors’ expectations high in a June 25 companywide email, saying the electric-car maker was on course to deliver a record number of cars throughout the quarter. Tesla’s deliveries are a closely watched industry number and the nearest reflection of sales, showing how many cars were actually delivered to customers.
“Challenges remain, but this is a step in the right direction,” said Wedbush analyst Dan Ives. “The numbers were above even the bull estimates and shows a clear rebound for the company. This is a feather in the cap for Tesla.”
Analysts were expecting the carmaker to deliver 91,000 vehicles during the second quarter, according to average analysts’ estimates compiled by FactSet. A disappointing 63,000 vehicles were delivered during the first three months of the year, when Tesla was plagued by challenges transporting its cars from its factory in Fremont, California, across the world and questions about waning customer demand. Tesla’s orders aren’t fully reflected in its delivery numbers until a buyer takes possession of their new car.
Tesla is facing increased competition for the high-end electric sports car market as automakers from Ford to Jaguar invest billions of dollars to develop their own electric lineups. Volkswagen and Mercedes-Benz began taking orders in May for new battery-electric vehicles with plans to roll out more models in the coming years. Jaguar’s I-Pace all-electric SUV swept industry awards at the New York Auto Show in April.
Deliveries for the company’s biggest seller, the Model 3, the company were 77,550 beating the 74,100 estimated by analysts surveyed by FactSet. Combined deliveries for the Model S sedans and Model X SUVs were 17,650 beating estimates of at 16,600, according to FactSet.
“Delivery numbers are important, but we need to see the tea leaves look good for the second half,” Dan Ives, an analyst with Wedbush Securities, said in an interview. Tesla’s production target for the year is “still an Everest task, especially with competition coming at them from all angles. The real question is going to be is this sustainable?”
Tesla told investors in April it expected to “deliver between 90,000 and 100,000 vehicles in Q2. Although it is possible to deliver a higher number of vehicles.”
The company also recently lost one of its top manufacturing executives at its Fremont plant, Peter Hochholdinger, who was vice president of production.
Tesla’s stock has lost almost a third of its value over the last year and currently has a market value of about $40.2 billion.
— CNBC’s Lora Kolodny contributed to this article.
