The third-quarter delivery figures of Tesla (TSLA) have left the Wall Street scratching their heads once again. The company frequently makes overambitious targets and embarrasses itself. This time it has done the same, again.
What went wrong?
Tesla CEO Elon Musk sent an email to his employees last month, talking about the number of deliveries going up to 100,000 in Q3. He called it “an incredibly exciting milestone for our company,” as it would touch the 100,000 marks for the first time in any quarter. Wall Street analysts were cautious with his words as Musk is famous for making tall promises. The consensus amongst analysts suggested that the company will only make 99,000 deliveries. Unfortunately, Tesla fell short from both expectations and made only 97,000 deliveries in Q3.
The figure is slightly higher than the 95,200 deliveries made in Q2 this year. It also marks a strong year-on-year growth from 83,500 vehicles delivered in Q3 2018. However, even with strong growth patterns, the company manages to disappoint analysts and its founder alike.
Is Tesla on the right path?
The company hasn’t revealed the full financial details of its third-quarter yet. However, if past performance is to be noted, Tesla hasn’t quite been able to turn profitable even though the company’s delivery figures are rising steadily. We must also note that most of its delivery growth comes from Model 3, its premium sedan. Interestingly, its best-selling model is also the least profitable for the company. The Model X and Model S, which are its top-of-the-line luxury models and have a higher profit margin have already experienced sales declines.
According to the company’s latest figures, the Model X and Model S make up only 17,400 of the deliveries made in Q3. In the second quarter, it made 17,650 deliveries for the two cars in the second quarter. On the other hand, Model 3 deliveries in Q2 were 77,550 while in Q3 they grew to 79,600.
It is also important to point out that more deliveries don’t always predict a great quarter for the company. The stock of the company, in after-hours trading, is already down by 4% since the news broke out. This means that even investors are not too thrilled with the company’s performance.
With mixed signals and incomplete data at hand, it would be impossible to predict Tesla’s year-round performance. We will have to wait for the company to release its third-quarter financials later this month.