Tesla announced that it has surpassed it’s previous production and delivery records during the second quarter, sending the shares up by 7% in premarket trading on Wednesday.
The electric auto maker unveiled its production and delivery outcomes Tuesday night. The third quarter is expected to vigorous and orders for the same has already been piled up. The announcement resulted in swelling share prices by 8% before the markets even opened.
CEO Elon Musk sent companywide email on June 25 stating that the company was on board to deliver a select record throughout the quarter and clearly, he wasn’t overstating. The company delivered 95,200 cars during the quarter ending June, an increase of 51.5% from the first quarter, beating its previous record of 90,700 deliveries made in the fourth quarter of last year.
The company has performed exceedingly well as it blew away analyst estimates of 91,000 according to data compiled by FactSet. It made deliveries of about 63,000 vehicles during the first quarter of the year, when it had to deal with challenges including transporting cars from its factory in Fremont, California, across the world as well as declining customer demand.
“Challenges remain, but this is a step in the right direction,” said Wedbush analyst Dan Ives. “The numbers were above even the bull estimates and shows a clear rebound for the company. This is a feather in the cap for Tesla.”
Tesla’s orders are not shown in its delivery numbers until the customer takes the possession of the vehicle. The company reported that 7,400 vehicles were still in transit, but not yet delivered, during the second quarter. Those sales will be reflected in its third-quarter report.
“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,” the company said while announcing its results.
Tesla is facing cut throat competition for high end electric sports car from its rivals including Ford and Jaguar who have been investing millions to set up electric product lines. Volkswagen and Mercedes-Benz started taking orders in May for battery-electric vehicles with plans to release more models in the coming years.
Deliveries for the company’s biggest seller, the Model 3, were 77,550 compared with 74,100 estimated by analysts. Combined deliveries for the Model S sedans and Model X SUVs were 17,650, also beating estimates of 16,600, according to FactSet data.
“Delivery numbers are important, but we need to see the tea leaves look good for the second half,” Ives said in an interview. Tesla’s production target for the year is “still an Everest task, especially with competition coming at them from all angles. The real question is going to be, is this sustainable?”
Tesla told investors in April it expected to “deliver between 90,000 and 100,000 vehicles in Q2. Although it is possible to deliver a higher number of vehicles.”
Recently, the company lost one of its top manufacturing executives at its Fremont plant, Peter Hochholdinger, who was vice president of production. The company has lost almost one third of its value over the last year. Tesla’s market capitalisation is valued at about $40 billion.