Tesla Reports Q3 Deliveries This Week: What To Expect

Tesla, Inc. TSLA is scheduled to report its third-quarter delivery number later this week.

Expectations are running higher after the electric vehicle giant reported record cumulative deliveries of over 386,000 vehicles in the first half of the year.

Q3 Expectations For Tesla: With Tesla hinting at targeting 50% average annual growth in vehicle deliveries over a multiyear time horizon, the company may have to clock in sales of about 750,000 in 2021 versus the 499,550 vehicles it delivered in 2020 to meet or exceed the target. 

This would leave the company shooting for 364,000 deliveries in the second half of the year.

The Street's Tesla Delivery Forecasts: Wall Street analysts are optimistic. The ballpark estimates of most analysts hovers around the magic number of 233,000 units for the third quarter. RBC Capital Markets analyst Joseph Spak estimates deliveries of 233,500 units, which would represent a 67% year-over-year increase.

The analyst expects Model 3/Y deliveries of 223,476 units and Model S/X deliveries of 10,000 units.

Regionally, Spak forecasts deliveries of 90,000 units in the U.S., 61,000 units in Europe, 66,476 units in China, 8,000 units in Canada and 8,000 units in the rest of the world.

Piper Sandler analyst Alexander Potter raised his third-quarter delivery estimate for Tesla to 233,000, premised on reports of strong production.

The analyst said he expects Tesla's China market share to inflect higher in September thanks to a focus on domestic deliveries over exports.

"We think Q3 will be TSLA's strongest quarter ever," he said. 

The chip shortage could prove to be a dampener if it all it impacts production, Potter said. Chinese EV peers Nio Inc. NIO and Li Auto, Inc. LI tempered delivery forecasts on the basis of component and chip shortages.

Related Link: EV Week In Review: Cathie Wood's Big Statement On Tesla, Chip Crunch Scare For Li Auto, Workshorse's Travails Continue, Nio Updates On Norway

Is Tesla's China Demand Holding Up? Tesla's wholesale sales in China came in at 32,968 units in July, of which 24,347 were exported, according to data from industry body China Passenger Car Association.

Domestic sales tumbled 69% month-over-month in July, triggering concerns about a slowdown in the company's key market.

Tesla made a comeback in August, selling 12,885 units in China. Exports climbed 29% month-over-month to 31,379 units.

CEO Elon Musk said the company makes cars for export in first half of the quarter and for the local market in the second half — a possible explanation for the relatively muted domestic sales in the first two months of the third quarter.

Will Tesla's Strong Quarter Translate To Strong Year? Piper Sandler's Potter lifted his 2021 Tesla delivery estimate from 846,000 units to 894,000 units.

EV penetration has trended steadily higher in recent months, especially in Europe and China, the analyst said.

Tesla's market share has also continued rising, he said. 

What Tesla Investors Want From Q3 Results: The focus when Tesla reports its third-quarter results, according to RBC's Spak, is likely to rest on usual financial items such as gross margins and cash flow and future developments, including capacity buildouts, battery tech, FSD, potential revenue recognition from rollout of additional features, as well as the semi shortage.

Tesla Ratings, Price Targets:  RBC has a Market Perform rating and $745 price target for Tesla shares.
Piper Sandler has an Overweight rating and $1,200 price target.

TSLA Price Action: At last check, Tesla shares were down 1.54% at $779.20 

Related Link: 5 Stock Plays To Leverage The 'Huge' Opportunity Presented By ADAS Over Next Decade