Tesla reported record deliveries for the third quarter but fell short of what analysts had been expecting, triggering a sharp downturn in the automaker’s stock.
For a company that often seems incapable of doing anything wrong in the eyes of Wall Street, the news marked the second big disappointment – and subsequent stock downturn – in barely two weeks, following the poor reception Tesla and CEO Elon Musk got for the “Battery Day” presentation.
That said, not everyone was disappointed in the numbers from the July-September period — which marked an all-time quarterly record for Tesla. “These numbers are particularly impressive in a year when most automakers are producing and delivering fewer vehicles,” said iSeeCars analyst Karl Brauer. “With multiple factories coming online in the next year there’s every indication Tesla’s volume will continue to grow in 2021 and beyond.”
(Tesla’s new Model S Plaid may make you see green.)
Tesla delivered a record total of 139,300 vehicles during the third quarter, compared with what Refinitiv said was a consensus forecast among industry analysts for deliveries of 134,720. Considering that big year-over-year jump, and an increase from the 90,650 it delivered during the pandemic-hit second-quarter, it might have seemed a solid bet to connect with investors.
But the tracking service noted that Tesla actually missed the consensus target with its two newest product line, delivering just 124,100 of its Models 3 and Y combined. The older Models S and X generated 11% of Tesla’s sales during the quarter.
Tesla faces some real challenges in the upcoming quarter if it is to hit its full-year target. CEO Musk has set a goal of delivering 500,000 vehicles for all of 2020 and, in regulatory filings, it has said it would “comfortably exceed” that number. That would mean finding homes for another 182,000 vehicles for its four product lines through the end of December, or nearly a one-third increase from the third quarter.
(No Battery Day afterglow for Tesla as stock price falls.)
The company has been pulling out all of the stops to meet that target. On the production side, its California plant is now back up to pre-pandemic levels, and it continues ramping up operations at its new plant in Shanghai. Initial production targets for the Chinese line are 150,000 vehicles, though a longer-term goal is 250,000.
For the third quarter, overall production exceeded deliveries by about 4%, at 145,036 vehicles.
As of midday Friday, Wall Street appeared to be pulling back on Tesla, its stock down around 5%, at around $427 a share.
Before the delivery and production numbers were released the stock had only begun rebounding after the hammering the automaker took following its Sept. 22 “Battery Day” announcement. During that session, Musk and other Tesla officials laid out plans to trim the cost of Tesla batteries by roughly half while also boosting production substantially. But the company didn’t deliver on some expectations, failing to talk about the million-mile battery Musk had previously signaled was in development.
(Tesla stock craters overnight, rebound uncertain.)
Tesla shares hit a 52-week adjusted high of $502.49.