Tesla Stock Jumps Again after Record Shipments in Q2

London: View from the street of Tesla Motors showroom with multiple luxury Tesla cars inside.

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Tesla Inc. reports 95,200 deliveries for the quarter in a press release today, causing the stock to rise 7% in after-hours trading.

Tesla Deliveries

Tesla Inc. has been criticized in the past for their ability to actually deliver vehicles, between being in “production hell” and the logistical issue of actually delivering the cars in 2018 it seems they have matured and are steadily eliminating bottlenecks within the company. To put the delivery number into perspective, in the first quarter of the year they delivered roughly 63,000 vehicles, which puts this quarter just below a 50% increase. The automotive industry typically takes long relationships with suppliers and very complicated contracts to work out, which is why a 50% increase in one quarter is so important.

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A statement from the company is provided below:

PALO ALTO, Calif., July 02, 2019 (GLOBE NEWSWIRE) -- In the second quarter, we achieved record production of 87,048 vehicles and record deliveries of approximately 95,200 vehicles. In addition, we made significant progress streamlining our global logistics and delivery operations at higher volumes, enabling cost efficiencies and improvements to our working capital position.

Orders generated during the quarter exceeded our deliveries, thus we are entering Q3 with an increase in our order backlog. We believe we are well positioned to continue growing total production and deliveries in Q3.

Customer vehicles in transit at the end of the quarter were over 7,400. Due to the order-to-VIN matching process we described in our Q1 2019 Shareholder Letter, which we extended to Model S and Model X in Q2 to improve process efficiency, this metric has become less relevant. As a result, we do not plan to disclose the customer vehicles in transit metric going forward.


Customer Demand

Closing the quarter with even greater demand than the company had originally is a big boost for the company as well showing that the customers will buy as many units as Tesla Inc. can make right now. What will be important and disclosed in their quarterly earnings is the regions ordering the vehicles, as there are different profit margins for different regions.

Their domestic U.S. market is going to be less important to the overall success of the company for two main reasons. The first is the federal tax credit as of July 1st was halved again, down to $1875 from an original $7500 then $3750 giving customers less incentive to purchase the vehicles. The second is the ramping of the Gigafactory Shanghai which should reach volume production in Q4 2019. With the help of the second Gigafactory Tesla optimistically estimated in their earnings call for Q1 the company could make 500,000 cars in 2019, with themselves even referring to the goal as ambitious.

The stock bump will certainly help investors as Tesla shares have had a less than stellar 2019, more information about the deliveries is expected with their earnings report which is estimated to be early August.


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