A recently leaked email from Tesla (NASDAQ:TSLA) CEO Elon Musk suggests that while the company has more than enough demand to meet its ambitious, self-imposed targets for the second quarter, Q2’s final results will likely come down to logistics and final deliveries. The leaked email, a copy of which was acquired by Bloomberg, was sent to Tesla employees on Tuesday.
In his message, Musk noted that Tesla is very close to setting a record in terms of the number of vehicles delivered in a single quarter. Tesla’s record was set in the fourth quarter of 2018, when the company delivered 90,700 vehicles to customers in a delivery blitz that saw employees and volunteers hand over electric cars to new customers well into the end of December.
Following is the full text of Elon Musk’s recently leaked email to Tesla employees.
“As you may have noticed, there is a lot of speculation regarding our vehicle deliveries this quarter. The reality is that we are on track to set an all-time record, but it will be very close. However, if we go all out, we can definitely do it! We already have enough vehicle orders to set a record, but the right cars are not yet all in the right locations. Logistics and final delivery are extremely important, as well as finding demand for vehicle variants that are available locally, but can’t reach people who ordered that variant before end of quarter. I have great faith in you. Please let me know if there is anything I can do to help. Thanks, Elon”
Tesla is yet to issue a statement about the contents of the recently leaked email.
Vehicle deliveries have proven to be a challenge for Tesla in the past. During the first quarter, it was the company’s delivery delays and difficulties that ultimately resulted in over 10,000 vehicles being in transit at the end of March. It was also delivery challenges that sparked the Tesla community’s initiative to help the company out during its end-of-quarter pushes.
Tesla’s second-quarter results will likely have the potential to affect the negative narrative surrounding the electric car maker. Since posting lower-than-expected delivery and production figures in the Q1 2019, Tesla critics have insisted on the idea that demand for the Model S, X, and 3 have been exhausted, or at most, overestimated. Musk, for his part, has directly addressed these concerns, assuring investors during the annual shareholder meeting that there is more than enough demand for the company’s electric cars.
Amidst Tesla’s end-of-Q2 push, Oppenheimer analyst Colin Rusch has reiterated his “Outperform” rating on the company. “We continue to believe TSLA is likely selling higher-end Model 3’s with sufficiently robust ASP’s and GM to drive shares higher when it announces 2Q:19 deliveries next week. We believe strong sell-through in the US/EU will support deliveries in 2Q/3Q, and we note that in China sales support for 2H19 remains a key uncertain variable in the debate on TSLA valuation,” Rusch wrote.
As of writing, Tesla stock is trading +1.13% at $222.25 per share.
Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.
