Tesla Inc. (TSLA) - Get Tesla Inc Report shares traded sharply higher Wednesday after it delivered a record number of vehicles over the second quarter even as tax credits for its clean-energy cars were cut in half and key executives continue to depart the company.
Tesla said total deliveries for the three months ending in June rose 51% from the same period last year to a company record 95,200 vehicles, well ahead of the FactSet consensus of just over 89,000. Tesla's flagship Model 3 sedan, the company said, found its way to 77,550 new owners, again topping Street forecasts. Overall production for the quarter was tabbed at 87,048 units, Tesla said, suggesting the company drew down from previous inventories to drive the quarterly delivery total.
Telsa also said it was "well positioned" to grow production and deliveries in the current quarter, even as U.S. tax credits that support purchases fell to $1,875 as of July 1, but made no reference to group profitability ahead of its second quarter earnings, which are likely to be published in the first week of August.
"Our delivery count should be viewed as slightly conservative, as we only count a car as delivered if it is transferred to the customer and all paperwork is correct," Tesla said in a statement posted on its website. "Tesla vehicle deliveries represent only one measure of the company's financial performance and should not be relied on as an indicator of quarterly financial results, which depend on a variety of factors, including the cost of sales, foreign exchange movements and mix of directly leased vehicles."
Tesla shares rose 4.1% to end at $234.90 Wednesday.
Tesla's stronger-than-expected deliveries could challenge recent investor concerns that the carmaker is facing both a "demand cliff" thanks to the expiration of tax credits and production difficulties linked to the departure of key company executives.
Jan Oehmicke, the former CEO of BMW's financing unit in France who was hired by founder and CEO Elon Musk last May, has left the company, according to the tech-focused website Electrek and Germany's WirtschaftsWoche.
The departure follows last week's exit of Peter Hochholdinger, Tesla's former head of vehicle production at its Freemont, California facility, who was named Lucid Motors VP of manufacturing late Monday. As many as 60 executives have left the company this year, according to Yale University's Jeffrey Sonnenfeld.
Gabe Hoffman a noted Musk critic whose Accipiter Capital Management has Tesla as it biggest short position, still thinks demand is a bigger issue for the company over the months ahead.
"Who in the US buys a car in July or August that is de facto $1,875 more expensive than it was in June? Nobody," he said. "Tesla will have to cut price again in Q3 .. and will sell under 70,000 cars" against company and Street guidance of around 100,000.
Goldman Sachs analyst David Tamberrino also thinks volume estimates for the second half of the year look generous "considering there are fewer levers (such as lower prices and leasing options) to pull to stoke demand going forward."
"While Tesla noted that over 7,400 vehicles were in transit at quarter's end, the company noted that it views this metric as less useful given the recent process efficiency improvement and will no longer be disclosing it in upcoming quarterly delivery releases," Canaccord Genuity analyst Jed Dorsheimer said. "We view the strong delivery numbers as further evidence that much discussed "demand cliff" theory is flawed, and believe that Tesla is well positioned to capitalize on the inflection higher of EV penetration rates."