Record Quarterly Deliveries Beat Estimates In Latest Win For Electric Automaker Tesla
Can Tesla keep up the growth? It can be easy to view growth like that as unsustainable but Tesla keeps on delivering.
(Photo by Justin Sullivan/Getty Images)
When Tesla started producing its first model 15 years ago, there was virtually no market for electric vehicles. That did not stop the innovative automaker from creating one.
When entering a new market, or building one from scratch, it can be difficult or impossible to know what to expect. That being the case, analysts have consistently underestimated Tesla — understandable, in that no one knew how many consumers out there would ultimately want one of its vehicles.
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Tesla’s latest delivery numbers show the company still has room to expand its grasp on the auto industry. In the April to June period, Tesla delivered 466,140 vehicles, a new quarterly record that smashed the average Wall Street analyst expectation of 445,000 deliveries.
The EV sector in general was helped along last quarter as U.S. federal tax credits kicked in. Tesla in particular, as the leader in electric vehicle manufacturing, was also able to fairly aggressively slash prices to make its products more affordable compared to electric cars produced by competitors.
China is Tesla’s second-largest market after North America. There, Tesla faces stiffer competition, but it is doubling down on its price war to prioritize sales growth abroad. Tesla can afford to accept lower margins as the cost of doing business in aggressively pressuring its international competitors.
By market capitalization, Tesla remains the world’s most valuable automaker. Its valuation will only go further upward in response to the latest delivery numbers, despite several recent controversies involving CEO Elon Musk.
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Can Tesla keep up the growth? The latest quarterly delivery numbers were up 10 percent from the prior quarter, and up a stunning 83 percent from the same quarter in 2022. It can be easy to view growth like that as unsustainable.
While a good quarter for sales and production is nothing to sneeze at, it is, at the end of the day, only a single quarter. A lot could happen in the next few years, and even just in the rest of 2023, to get in Tesla’s way.
Yet, by 2030, half of all new cars being sold in the U.S. are now expected to be electric. How many of them will be Teslas is anyone’s guess, but so far none of the major legacy automakers have even come close to toppling the undisputed EV industry leader.
The new delivery record also comes on the heels of other recent wins for Tesla. Perhaps most notably, GM, Ford, and niche EV automaker Rivian all announced they would be adopting Tesla’s North American Charging Standard over rival charging platforms. This would be a bit like Google announcing that Android phones would be switching to Apple’s iOS operating system. Although it will allow consumers who want to take advantage of Tesla’s increasingly broad charging network to buy vehicles made by other manufacturers, the move is also an implicit recognition by sometimes bitter rivals of Tesla’s impressive reach and technological mastery.
Tesla’s stock has repeatedly been the most shorted security on Wall Street. Like any security, the share price of Tesla stock fluctuates, and short sellers who timed things just right certainly could have realized gains in the not-too-distant past. Most of them, though, have gotten massively burned. Traders shorting Tesla shares have lost billions in the wake of Tesla’s recent share price rally.
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Tesla stock has been a darling of small investors, myself included. Its cars have been increasingly embraced. The company has proven adept, again and again, at forging paths where none previously existed.
Tesla’s latest record delivery numbers represent just one quarter. But corporate legacies are built a quarter at a time. Over many years now, expecting the unexpected from Tesla has paid off handsomely.
Jonathan Wolf is a civil litigator and author of Your Debt-Free JD (affiliate link). He has taught legal writing, written for a wide variety of publications, and made it both his business and his pleasure to be financially and scientifically literate. Any views he expresses are probably pure gold, but are nonetheless solely his own and should not be attributed to any organization with which he is affiliated. He wouldn’t want to share the credit anyway. He can be reached at jon_wolf@hotmail.com.
