What To Expect When Tesla Reports Q1 Deliveries

Tesla, Inc. TSLA is expected to release first-quarter delivery numbers next week. The latest numbers will come as the company's stock has seen a sell-off since February and a chip shortage has forced many automakers to trim production.

Upbeat Expectations For Tesla: Although Tesla did not give a ballpark figure for 2021 deliveries, the ongoing sales momentum is likely to continue. The company is coming off a year in which it delivered a record 499,550 vehicles.

First-quarter deliveries are expected at 170,000 units, which suggests a 92% year-over-year increase, RBC Capital Markets analyst Joseph Spak said, citing checks and regionally reported data.

This represents a 6% quarter-over-quarter decline and a scale back from Spak's earlier estimate of 182,000.

Breaking down deliveries by model, the RBC analyst estimates 164,800 Model 3/Y deliveries and 5,300 Model S/X deliveries.

Tesla may have produced 170,000 cars in the quarter, with 96,000 expected to have been rolled out of its Fremont factory and 74,000 from its Shanghai Giga, Spak said.

The market is pricing in a bullish number for the quarter, judging by trading in the options market.

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Tesla's China Momentum Intact: Tesla began selling made-in-China Model Y vehicles at the start of the year. The vehicle is seen as a disruptor in the company's key Chinese market given that it is priced competitively to similarly positioned SUVs from traditional automakers.
The slowdown in the sales of domestic Chinese EV makers such as NIO Limited NIO, XPeng Inc. XPEV and Li Auto Inc. LI has partly been blamed on the Tesla competition. Even as these homebred companies reported month-over-month declines in deliveries in February, Tesla posted an 18% increase.

Wedbush analyst Daniel Ives said he believes Tesla is on track to be on a 200,000-plus unit trajectory in China for the year, which remains a linchpin for the company hitting its 750,000 to 800,000 figure for the year.

After a string of price cuts last year, the company has recently begun hiking vehicle prices, which underlines the strength in demand.

What To Watch In Tesla's Q1 Report: When Tesla reports its first-quarter results, the focus is likely to be on financial metrics such as gross margins and cash flow, as well as technology and future development, RBC's Spak said.

The analyst expects the company to shed light on how the chip shortage is impacting Tesla.

Downside risk could exist for the consensus deliveries forecast of 831,000 for 2021, particularly the number for the second quarter, due to chip shortages, he said. 

On Friday, Nio said it is halting production at its plant for five days due to shortages in chip supply, and the automaker also trimmed its deliveries forecast for the first quarter.

RBC has a Sector Perform rating on Tesla shares.

See also: How to Invest in Tesla Stock

TSLA Price Action: At last check, Tesla shares were down 4.28% Friday at $613. 

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