tesla q3 delivery expectations

Analysts expect Tesla to deliver a record number of cars in the third quarter amid the typical end-of-the-quarter delivery push. In the second quarter of 2022, Tesla’s deliveries had fallen for the first time since 2020.

Wall Street analysts expect Tesla to deliver between 350,000-370,000 cars in the third quarter of 2022. It produced 258,580 cars in the second quarter and delivered 254,695. Analysts’ estimates suggest a massive rise in deliveries from Q1 when Tesla had delivered a record 310,000 cars.

Since the first half of 2020, when COVID-19 lockdowns in China and the US, led to cutbacks in Tesla’s production, the company has been delivering a record number of cars every quarter. The second quarter of 2022 was the first time in two years when Tesla’s production fell on a quarterly basis.

At the beginning of the year, Tesla gave guidance of long-term delivery growth CAGR of 50%. While its production fell in the second quarter of 2022, it reiterated its guidance. Last year, the Elon Musk-run company produced 930,422 cars and delivered 936,222.

Unlike legacy automakers who have weeks of inventories, Tesla is a supply-constrained company and can sell only as many cars as it can produce. It currently has four Gigafactories where it produces cars.

While the Freemont and Shanghai Gigafactories have achieved scale, Tesla is in the process of ramping up production at its Belin and Austin Gigafactories.

Tesla Looking to Push Q3 Deliveries to a New Record

While Musk said that the Berlin and Austin factories are losing “billions of dollars” Tesla increased its capex budget for 2022 as well as 2023.

Electrek reported that Tesla management mailed its employees that “We will be delivering a very high volume of vehicles to eagerly waiting customers during the final days of Q3. To help ensure we can delight as many customers as possible, the delivery team is requesting additional support with key delivery-execution tasks.”

Those following Tesla would appreciate that such “email leaks” and quarter-end delivery pushes are not new for Tesla. Often, we see such internal emails get leaked where Musk is seen pushing employees for extra efforts at the end of the quarter.

Tesla is also reportedly looking at higher fleet sales to lift its third-quarter deliveries. Last year, Hertz announced that it intends to buy 100,000 Tesla cars. Recently, Hertz and General Motors announced that the former would order up to 175,000 EVs from General Motors.

EV Industry is Grappling with Supply Chain Issues

Earlier this week, Li Auto downwardly revised its third-quarter delivery guidance amid supply chain issues. Other Chinese EV (electric vehicle) companies like Xpeng Motors and NIO have seen a slowdown in production due to the unavailability of key parts, especially chips. Even legacy automakers like Ford and General Motors are feeling the heat from the chip shortage.

Ford stock has slumped amid the broader market turmoil. However, billionaire investor Ray Dalio bought more Ford shares in the second quarter of 2022.

The supply chain issues have hit Tesla also and it delayed the launch of its Cybertruck to 2023.

Analysts Get Bullish on Tesla Stock

After President Boe Biden signed the Inflation Reduction Act of 2022, several Wall Street analysts issued bullish notes on Tesla. According to Wolfe Research, Tesla would stand to gain from the Inflation Reduction Act. Wolfe upgraded Tesla stock to a buy and raised its target price.

Notably, Tesla is much more vertically integrated than most automakers. It makes many components in-house and has been working to secure supplies of critical battery metals. It is also considering setting up a lithium refining plant. During the company’s Q2 2022 earnings, Musk called lithium refining a “money minting business.” The world’s richest person also termed lithium refining a “licence to print money.”

Lithium indeed is among the most sought-after commodities as automakers scramble to secure the supplies of key battery minerals.

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