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Tesla reveals big uptick in Model 3 deliveries, 1550 in Q4 and 860 in transit

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Luxury electric vehicle maker Tesla Inc (TSLA) said on Wednesday that it reached an all-time best quarter for combined deliveries of its flagship Model S and X vehicle. In addition, the company revealed that it delivered 1,550 of its mass market Model 3 compact sedan in the fourth quarter, a big increase from the 220 units delivered in the previous quarter. Deliveries rose 27% in the fourth quarter from the prior-year period, and 9% over Q3 2017.

Tesla delivered a total of 29,870 vehicles in Q4, of which 15,200 were Model S, 13,120 were Model X, and 1,550 were Model 3, said the company in its Q4 2017 Vehicle Production and Deliveries report. By comparison, the Silicon Valley-based electric carmaker delivered 26,150 vehicles in Q3, including 14,065 Model S vehicles and 11,865 Model X.

Even more notable is the fact that Tesla exceeded its guidance of delivering 100,000 flagship cars in 2017, closing the year at 101,312 Model S and X vehicles delivered, or an increase of 33% over 2016.

Tesla notes that an additional 3,380 vehicles were in transit to customers in the fourth quarter, but will not be counted as a delivery until Q1 2018. Of that number, 860 vehicles were Model 3.

The increase in Model 3 deliveries, a total of 2,410 units, including the number of vehicles in transit, bodes well for Tesla, as the Elon Musk-led company looks to overcome any negative perception that the carmaker won’t be able to hit its ambitious production and delivery targets. Following Musk’s prior address that there “are no fundamental issues with the Model 3 production or supply chain,” Tesla reassured investors in its latest report that production bottlenecks are being actively addressed.

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“During Q4, we made major progress addressing Model 3 production bottlenecks, with our production rate increasing significantly towards the end of the quarter. In the last seven working days of the quarter, we made 793 Model 3s, and in the last few days, we hit a production rate on each of our manufacturing lines that extrapolates to over 1,000 Model 3s per week.”

In addition, Tesla notes that its factory was able to produce as many Model 3 vehicles in the last few weeks of December, as they did in the four months prior. “This is why we were not able to deliver many of these cars during the holiday season, just before the quarter ended.” the company further asserted.

The company also confirmed the ramp up of Model 3 deliveries to non-employee customers, as evident from the high volume of Model 3 sightings across California and other key U.S. markets. New Model 3 customers, many who took delivery from the company’s newest Los Angeles-based delivery center, have taken to YouTube to provide their first impressions of the vehicle.

Tesla reassured investors in its Q4 2017 Vehicle Production and Deliveries report that the company remains focused on quality over volume of deliveries.

“As we continue to focus on quality and efficiency rather than simply pushing for the highest possible volume in the shortest period of time, we expect to have a slightly more gradual ramp through Q1, likely ending the quarter at a weekly rate of about 2,500 Model 3 vehicles. We intend to achieve the 5,000 per week milestone by the end of Q2.”

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It’s not clear how the pushback of 5,000 Model 3 vehicles produced per week by one quarter will sit with investors, but if the latest report is any indication that the company is making significant progress in ramping up, it’s only a matter of time before Tesla will truly reach its goal of becoming a mass market player in the industry.

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Investor's Corner

Tesla upgraded to Outperform at Baird on ‘physical AI’ outlook

Analyst Ben Kallo also raised Tesla’s price target to $548 from $320.

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Credit: Tesla China

Tesla (NASDAQ:TSLA) received a bullish nod from Baird this week, with the firm upgrading the stock to “Outperform” on expectations that the company is positioned to lead in what it calls the “physical AI” era. 

Analyst Ben Kallo also raised Tesla’s price target to $548 from $320, noting that despite muted quarterly results, shares have gained 24% in the past month, outpacing the S&P 500’s 3% rise.

Long-term milestones

The Baird analyst shared his insights in a note to investors. “Relatively muted stock reactions following a series of less-than-stellar quarters and investor inbounds regarding long-term initiatives lead us to believe focus has increasingly shifted to the future for TSLA. We now expect shares to ‘Outperform’ as TSLA is increasingly viewed as the leader in physical AI,” the analyst wrote in his note.

Kallo also pointed to Tesla’s ambitious roadmap as a key reason for the upgrade, as well as the company’s new proposed compensation plan for CEO Elon Musk. The package ties rewards to ambitious milestones, including the delivery of 20 million vehicles annually, the deployment of 1 million robots and 1 million robotaxis, and 10 million Full Self-Driving (FSD) subscriptions. 

Vehicles, robots, and energy

Baird’s scenario analysis suggested that Tesla could reach a valuation of more than $5.5 trillion by 2035 in its minimum case, with potential upside to $12 trillion and $3,000 per share if milestones are exceeded, as noted in an Investing.com report.

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Beyond Musk’s compensation framework, Baird highlighted multiple near-term catalysts for Tesla. These include potential updates on Optimus, the rollout of more affordable vehicles, new Robotaxi market entries, and an upcoming shareholder vote on Musk’s pay package. Expansion in Tesla’s energy storage and software businesses was also flagged as a growth driver. Kallo also described Tesla as having “lots of irons in the fire,” ranging from the scaling of the Semi to recurring revenue streams tied to software.

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Tesla called ‘biggest meme stock we’ve ever seen’ by Yale associate dean

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Credit: Tesla

Tesla (NASDAQ: TSLA) is being called “the biggest meme stock we’ve ever seen” by Yale School of Management Senior Associate Dean Jeff Sonnenfeld, who made the comments in a recent interview with CNBC.

Sonnenfeld’s comments echo those of many of the company’s skeptics, who argue that its price-to-earnings ratio is far too high when compared to other companies also in the tech industry. Tesla is often compared to companies like Apple, Nvidia, and Microsoft when these types of discussions come up.

Fundamentally, yes, Tesla does trade at a P/E level that is significantly above that of any comparable company.

However, it is worth mentioning that Tesla is not traded like a typical company, either.

Here’s what Sonnenfeld said regarding Tesla:

“This is the biggest meme stock we’ve ever seen. Even at its peak, Amazon was nowhere near this level. The PE on this, well above 200, is just crazy. When you’ve got stocks like Nvidia, the price-earnings ratio is around 25 or 30, and Apple is maybe 35 or 36, Microsoft around the same. I mean, this is way out of line to be at a 220 PE. It’s crazy, and they’ve, I think, put a little too much emphasis on the magic wand of Musk.”

Many analysts have admitted in the past that they believe Tesla is an untraditional stock in the sense that many analysts trade it based on narrative and not fundamentals. Ryan Brinkman of J.P. Morgan once said:

“Tesla shares continue to strike us as having become completely divorced from the fundamentals.”

Dan Nathan, another notorious skeptic of Tesla shares, recently turned bullish on the stock because of “technicals and sentiment.” He said just last week:

“I think from a trading perspective, it looks very interesting.”

Nathan said Tesla shares show signs of strength moving forward, including holding its 200-day moving average and holding against current resistance levels.

Sonnenfeld’s synopsis of Tesla shares points out that there might be “a little too much emphasis on the magic wand of Musk.”

Elon Musk just bought $1 billion in Tesla stock, his biggest purchase ever

This could refer to different things: perhaps his recent $1 billion stock buy, which sent the stock skyrocketing, or the fact that many Tesla investors are fans and owners who do not buy and sell on numbers, but rather on news that Musk might report himself.

Tesla is trading around $423.76 at the time of publication, as of 3:25 p.m. on the East Coast.

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Elon Musk affirms Tesla commitment and grueling work schedule: “Daddy is very much home”

The remarks came as Tesla shares crossed the $400 mark on the stock market.

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Tesla CEO Elon Musk reiterated his commitment to the electric vehicle maker and its future projects this week, responding to speculation following his $1 billion purchase of TSLA stock. 

The remarks came as Tesla shares crossed the $400 mark on the stock market, extending a rally fueled in part by Musk’s TSLA purchase.

Elon Musk’s nonstop work schedule

Amidst the reaction of TSLA stock to Musk’s $1 billion investment, Tesla owners such as @greggertruck noted that “Daddy’s home.” Musk replied, stating that “Daddy is very much home.” He then shared details of a packed weekend of work, which was definitely grueling but completely within character for a “wartime CEO.”

Musk did note, however, that he had lunch with his kids during the weekend despite his extremely busy schedule.

“Daddy is very much home. Am burning the midnight oil with Optimus engineering on Friday night, then redeye overnight to Austin arriving 5am, wake up to have lunch with my kids and then spend all Saturday afternoon in deep technical reviews for the Tesla AI5 chip design. 

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“Fly to Colossus II on Monday to walk the whole datacenter floor, review transformers and power production (excellent progress), depart midnight. Then up to 12 hours of back-to-back meetings across all Tesla departments, but with a particular focus on AI/Autopilot, Optimus production plans, and vehicle production/delivery,” Musk wrote in his post

Wartime CEO

Wedbush analyst Dan Ives described Musk as operating in “wartime CEO mode,” highlighting autonomous driving and AI as a trillion-dollar market opportunity for Tesla. Musk reiterated this point late last month as well, when he outlined the several projects he is juggling among his numerous companies. At the time, Musk stated that he was busy with Starship 10, Grok 5, and Tesla V14. This was despite his notable presence on X. 

With Tesla Master Plan Part IV being partly released, the company is entering what could very well be its most ambitious stage to date. To usher in an era of sustainable abundance, Tesla would definitely require a “wartime CEO,” someone who could remain locked in and determined to push through any obstacles to ensure that the company achieves its goals.

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