Tesla Beats Delivery Estimates For Third Quarter

For the third quarter, Telsa (NASDAQ:TSLA) announced that it delivered 24,500 of its electric vehicles. That was a 70 percent increase from last quarter’s delivery of 14,402 and a 111 percent increase from the same quarter last year. Tesla claims that it’ll have 50,000 vehicles by the end of the second half.

The company has been taking aggressive measures to keep sales of the Model S and Model X strong. In a press release, the company revealed that 15,800 Model S and 8,700 Model X vehicles were sold in the third quarter. Another 5,500 vehicles are currently in transit and will be counted in Q4.

It’s unclear how many deliveries might be due to price cuts. Tesla retailers were reportedly offering discounts on new cars. Tesla is now offering a two-year lease on Model S and X vehicles and producing a faster new Model S sedan with a larger battery to encourage orders for its electric vehicles. The 60-kilowatt-hour Model S starts at $66,000 before federal or state incentives.

In a letter written by chief executive Elon Musk in August, he said, “The third quarter will be our last chance to show investors that Tesla can be at least slightly positive cash flow and profitable before the Model 3 reaches full production.” Tesla plans to start production of its midrange $35,000 Model 3 by the end of next year. The company has already received more than $10 billion in orders for the Model 3.

The huge number of orders in Q3 is good news for Tesla. However, it might not be enough for Tesla to meet its earlier forecast of 80,000 to 90,000 deliveries in 2016. The third-quarter deliveries figure is a preliminary number that may change slightly in November when the company reports earnings for the period. Tesla said in its statement, “Our Q3 delivery count should be viewed as slightly conservative, as we only count a car as delivered if it is transferred to the customer and all paperwork is correct.”

Production issues and parts shortages caused problems for Tesla the start of the year. In January and February, the Model X in particular was plagued by product shortages. Those problems seem to be behind it, as the company said its Fremont assembly plant was running smoother in the third quarter.

The company has also increased the number of vehicles being built, ramping up production 37 percent to 25,185from 18,345. For the last quarter of 2016, Tesla said it expects its deliveries and production to be “at or slightly above Q3.” Musk said the company will be pumping out half a million cars annually by the end of 2018. That’s five times today’s production level.

 

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