Following a quarter with supply chain pressures, Tesla is expected to announce their delivery and production numbers for Q2 this week. Here’s what to expect:
The Numbers to Beat:
The Wall St. consensus is 201,000 vehicles delivered composing of ~194,000 Model 3/Y and ~6,700 Model S/X. The consensus is predicting a record quarter for deliveries and a ~120% increase year over year.
Analyst revisions as quarter-end approaches have been mixed. Deutsche Bank analyst Emmanuel Rosner on Wednesday lowered his delivery forecast from 207,000 to 200,000. Rosner is citing “softer China volumes” as the reason for his lowered guidance.
As estimates coalesce around 200,000 vehicles, Wedbush analyst Dan Ives has called the mark "the line in the sand" for Q2. Ives maintains his ‘buy’ rating and price target of $1,000 and also believes “the trajectory heading into 2H is positive and should benefit from Musk & Co. over the next year."
Tesla Daily’s Take
While we see Tesla beating expectations with 202,824 vehicles delivered, we believe the production number is far more important. Tesla appears to be supply-constrained, so focusing on deliveries overemphasizes relatively minor factors such as timing of Tesla's international shipments.
In each of the last two quarters, Tesla has delivered more vehicles than they have produced. That is only possible by reducing inventory, which can be accomplished by selling display vehicles from stores or reducing turnover time when shipping vehicles. Mathematically, that can not occur every single quarter.
Tesla reported just eight days of inventory to end Q1-21, a multi-year low. With such low inventory, it would not be surprising to see production outpace deliveries, returning inventory closer to historical levels.
As such, we expect Tesla to produce 208,824 vehicles in the second quarter, adding about 6,000 vehicles to inventory. We believe this inventory will likely be in-process exports from Tesla's Shanghai Gigafactory.
What did you think Tesla's delivery numbers will be? Let us know on Twitter, @teslapodcast.
Disclosure: Rob Maurer and Brennan Ertl are long TSLA stock and derivatives.