Tesla, Inc. TSLA reported strong third-quarter deliveries that beat expectations of most analysts, aided by a late-quarter push. The company managed to weather several hiccups, including component and chip shortages, intensifying competition and demand slowdown in China.
Tesla Q3 Deliveries Sizzle: Tesla reported third-quarter deliveries of 241,300 vehicles, beating the consensus estimate of 233,000.
The metric represents a 73.2% year-over-year growth and a 20% quarter-over-quarter increase.
Earlier this week, Wedbush analyst Daniel Ives said he expects deliveries of 230,000 vehicles for the quarter.
"The company is on a "massive trajectory" in September, with deliveries for the month likely hitting 145,000 to 150,000, he said. China is a major "swing factor," Ives said.
The analyst noted a robust pick-up in the pace of EV deliveries in the U.S. and China in the last 4-6 weeks.
Tesla clarified that its delivery count should be viewed as slightly conservative, as it counts a car as delivered if it is transferred to the customer and all paperwork is correct.
"Final numbers could vary by up to 0.5% or more," the company said.
During the quarter, the company produced 228,882 Model 3/Y vehicles and 8,941 Model S/X vehicles.
Model-wise Break-down: Third-quarter Model 3/Y deliveries came in at 232,025, 16.4% higher than in the second quarter, and Model S/X sales stood at 9,275, up sharply from 1,890 units sold in the previous quarter.
RBC Capital Markets analyst Joseph Spak expected Model 3/Y deliveries of 223,476 units and Model S/X deliveries of 10,000 units.
Regionally, Spak modeled 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.
The pick-up in Model S/X sales may have to do with the release of the refreshed Model S and the new high-performance Model S Plaid vehicles, which Tesla began delivering in June.
Why It's Important: Automakers continue to be constrained by supply chain disruptions resulting from various factors, such as the still-prevalent pandemic and other geopolitical risks. Component shortages have forced several legacy automakers as well as EV manufacturers to idle production capacity and also scale back forecast.
Tesla's performance in China, its key market, was very ordinary in the first two months of the quarter. In July, the company's domestic sales in China fell 69% month-over-month, although exports from the country were fairly robust.
With the Giga Berlin opening being pushed out, Tesla began exporting Model Y vehicles to be delivered in Europe from China. Tesla's Elon Musk clarified that the company focuses on exports in the first-half of the quarter before shifting focus to domestic sales in the second-half.
What's Next: Wedbush projects the chip shortage will shave about 40,000 units off Tesla's annual delivery number. Tesla's auto gross margin will likely expand over the coming quarters, which is key to the longer-term thesis, Ives said.
Recently, Piper Sandler analyst Alexander Potter raised his 2021 delivery estimate from 864,000 units to 894,000 units, premised on strong EV penetration in recent months, especially in Europe and China and rising market share for Tesla.
The focus now shifts to Tesla's third-quarter results, as investors keenly await details on metrics 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 closed Friday's session down 0.03% at $775.22 and was down an incremental 0.03% in after-hours trading.
Related Link: What This Analyst Likes About Q3 Deliveries Updates From XPeng and Nio
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