Investor's Corner

Tesla Q4 delivery numbers on deck as the company pushes to meet annual guidance

After a somewhat slow start that resulted in adjusted guidance during the first half of this year, Tesla Motors knocked out a record-setting third quarter with vehicle deliveries up 114% over the same quarter in 2015 and 72% over Q2. The company also managed to bring in a profit in the third quarter for the first time since 2014. All that good news has translated into high expectations for the final quarter of the year.

Tesla started off the year with plans to deliver between 80,000 and 90,000 cars in 2016. Because of a slower than expected ramp up in Model X production in the first half of the year, the company lowered its overall guidance at the end of Q3 to 79,000 cars. To get there, the company needs to deliver 25,000 vehicles or more this quarter. Will Tesla hit its mark?

Tesla quarterly vehicles deliveries based on SEC filings. [Source: Daniel Sparks via Motley Fool]

Tesla quarterly vehicles deliveries based on SEC filings. [Source: Daniel Sparks via The Motley Fool]

It depends on sales of the Model S says financial analyst Daniel Sparks of The Motley Fool. Tesla has several incentives for buyers this quarter including the $1,000 discount via a continuation of its referral program and free unlimited Supercharger access for buyers that place an order on a new Model S or Model X by the end of the year. Vehicles purchased in 2017 will be entitled to 400 kWh of free electricity a year — enough for about 1,000 miles of driving. After that, drivers will pay a small fee designed to cover the cost of electricity used.


Tesla also released its new self-driving hardware in the fourth quarter for the next generation of Autopilot. Once the company completes calibrating the software based on fleet data collected in ‘Shadow Mode’, it will begin a series of over the air updates which CEO Elon Musk said could arrive as early as this week.

Assuming Tesla hits its Q4 delivery goal – Tesla management has indicated that it expects to deliver “just over 25,000” – the number will represent only a tiny increase over the previous quarter but a 44% increase in deliveries over calendar year 2015.

Whether deliveries this quarter will come from new customers for the Model S or from filling existing orders for the Model X remains to be seen. Tesla refuses to reveal monthly sales data, so predictions about quarterly deliveries are little more than educated guesses. The company does make it a practice to release delivery data within 3 days after the end of a quarter, so we should have the official information by Tuesday of next week.

How many deliveries Tesla makes for the year will have an impact on investor confidence in the company going forward. We are now less than a year away from the start of production for the Model 3 midsize sedan, the car that’s anticipated to see roughly 400,000 vehicle sales a year by 2018.

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