According to an email sent by CEO Elon Musk to employees last night, Tesla is on pace for a new record quarter for deliveries – beating the last record achieved at the end of last year.
In Q4 2018, Tesla delivered a record of 90,700 cars – making it the best quarter in its history and delivering its second quarterly profit in a row.
It was followed by a very difficult quarter for Tesla in Q1 2019.
During the first three months of the year, Tesla lost $702 million as deliveries slowed down due to a difficult launch of the Model 3 in Europe and Model S/X deliveries plummeting.
Many feared that the trend would continue in the second quarter, but Tesla is apparently turning things around.
In an email to employees last night according to two sources speaking to Electrek, Musk claimed that Tesla could break its last delivery record:
“As of yesterday, we had over 50,000 net new orders for this quarter. Based on current trends, we have a good chance of exceeding the record 90,700 deliveries of Q4 last year and making this the highest deliveries/sales quarter in Tesla history!”
While Musk didn’t seem worried about demand with 50,000 new orders and over a month left in the quarter, it’s still not in the pocket on the production front.
The CEO said that they need to sustain 1,000 Model 3 vehicles per day throughout the rest of the quarter in order to achieve a new delivery record:
“In order to achieve this, we need sustained output of 1,000 Model 3’s per day. Almost all parts of the Model 3 production system have exceeded 1,000 units on multiple days (congratulations!!) and we’ve averaged about 900/day this week, so we’re only about 10% away from 7,000/week.”
Musk thinks that if the Tesla team “rallies hard”, they can do it.
Tesla declined to comment on the email.
The email comes after Tesla’s stock (TSLA) sustained six straight days of losses and it is down to a more than 2-year low.
Wall Street’s biggest concern appears to be demand and Musk’s email addresses that directly claiming that they already have over 50,000 orders this quarter.
While that’s encouraging, it doesn’t look like it’s in the bag. It’s good that they already have over 50,000 orders, but they will need a lot more orders by the end of the quarter in order to secure the demand. There weren’t enough vehicles in transit in Q1 to compensate for the difference and they need to take into account that some of those orders won’t be delivered by the end of the quarter.
They have a few things on their side for that, like the tax credit going down again for them at the end of the quarter which should incentivize some people to order now in the US.
Then they also need to increase production, which is easier said than done.
In short, the email is encouraging. It shows that demand is still strong for Model 3, but I wouldn’t put more than 50% on a new record quarter for Tesla deliveries just yet.
What do you think? Let us know in the comment section below.
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