Tesla Vehicle Deliveries Rebound to Record After China Shutdown
Elon Musk’s auto maker requires another boost in quarterly deliveries to meet annual target
Tesla Inc. TSLA -1.10% vehicle deliveries rebounded strongly in the most recent quarter, though the record figure was short of Wall Street’s forecasts and leaves the company requiring a further increase in the final three months of 2022 to meet annual growth objectives.
Tesla on Sunday said it had delivered 343,830 vehicles to customers in the three-month period ended in September, up from about 255,000 in the prior quarter that was dented by a temporary shutdown of its factory in China.
Deliveries were up roughly 42% from last year’s third quarter, when Tesla handed over 241,000 vehicles. Analysts surveyed by FactSet forecast that Tesla would deliver around 371,000 vehicles in the third quarter.
Tesla on Sunday signaled the delivery shortfall reflected changes it is making to its processes which, it said, “led to an increase in cars in transit at the end of the quarter.”
The adjustment, the company said, was necessary because as production volumes grow, vehicle transportation capacity is “becoming increasingly challenging to secure” at a reasonable cost during the last few weeks of the quarter, when its shipments typically surge.
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Tesla has a long-term goal to increase output by an average of 50% annually and, in July, said that was still attainable despite production disruptions. To reach that level, Tesla would need to roughly deliver a record-setting 495,000 vehicles in the fourth quarter. Wall Street thinks the company will struggle to reach 1.4 million, per FactSet, and deliver 457,000 vehicles in the final three months of this year.
Tesla has been ramping up output to keep pace with surging demand and to recover from the idling of the Shanghai factory, its largest, because of local Covid-19 restrictions earlier this year. Tesla also had trouble getting its new factories in Germany and Texas up to speed.
“These factories don’t just magically work,” Tesla Chief Executive Elon Musk said at the company’s annual shareholder meeting in August. “So still a lot of work to do.”
To keep pace with customer orders, Tesla has boosted production capacity across its plants in the U.S., Europe and China. The company produced 365,923 vehicles in the third quarter, up from about 238,000 in the year-earlier period.
Tesla’s record deliveries are expected to help the company post its highest ever quarterly sales and a record profit of $3.34 billion when it reports third-quarter results, topping the $3.32 billion first quarter profit. Quarterly results are scheduled for Oct. 19, Tesla said.
Tesla delivered roughly 325,158 combined Model 3 sedans and Model Y compact sport-utility vehicles during the third quarter, up from about 232,000 from the year-earlier period. The company delivered 18,672 of its luxury Model S sedans and Model X SUVs, up from nearly 9,300 last year.
Tesla on Friday unveiled a prototype of its humanoid robot, called Optimus, that Mr. Musk says could be available for wider purchase in three to five years and cost less than $20,000. He also detailed plans for Tesla to further expand its advanced driver-assistance technology, among other initiatives, at the company’s second AI Day.
Shares of Tesla are down about 25% this year with inflation soaring and supply-chain disruptions weighing on wider investor sentiment. Mr. Musk’s bid for social-media company Twitter Inc. also has weighed on Tesla’s stock. Mr. Musk has sold some Tesla shares to pay for the transaction he is trying to abandon.
Mr. Musk previously expressed concern about the global economy but struck a more optimistic tone at the shareholder meeting in August.
“I think inflation is going to drop rapidly,” Mr. Musk said, noting that because Tesla has to buy supplies months out, it can see where prices are headed. “The interesting thing that we’re seeing now is that most of our commodities, most of the things that go into a Tesla—not all but more than half—the prices are trending down in six months.”