Tesla Crushes Q2 Delivery Estimates, May Become Eligible for S&P 500 Inclusion

Rob Maurer

Deliveries

Tesla (TSLA) -Get Report today reported second quarter deliveries of 90,650 vehicles, up 2% quarter-over-quarter. Per FactSet, the quarter-end analyst consensus delivery estimate was 72,149 vehicles.

Tesla's deliveries in the first half of the year totaled 179,146 vehicles, up 13% from the first half of 2019 in a more challenging macro-environment.

Screen Shot 2020-07-02 at 8.01.09 AM

Production

In addition to reporting deliveries, Tesla reported second quarter production of 82,272 vehicles, down just 4.5% year-over-year despite significant production downtime due to the impacts of COVID-19.

Quarterly Profit and S&P 500 Inclusion?

With Tesla's delivery numbers in the books, investors will turn their attention to the company's Q2 earnings report which is expected in late July. If Tesla is able to post a GAAP profit, they will clear the final requirement to become eligible for inclusion in the S&P 500 index

In past quarters when Tesla's deliveries have exceeded 65,000 vehicles, the company has reported quarterly GAAP profitability five out of six times. The lone exception was Q2-19, a quarter with profitability headwinds from restructuring and foreign exchange losses, the ramp of the lower-margin Standard Range Plus Model 3, and the introduction of the "raven" powertrain on Model S/X causing discounts on outdated powertrain vehicles. Deliveries in Q2-19 totaled 95,356 vehicles.

In the final days of Q2-20, Elon Musk urged Tesla employees to make a final push for "breaking even" on the quarter.

“Breaking even is looking super tight. Really makes a difference for every car you build and deliver. Please go all out to ensure victory!” - Elon Musk

Musk appeared to be satisfied with the end-of-quarter effort, sending an email the morning after quarter close to express his gratitude.

“Just amazing how well you executed, especially in such difficult times. I am so proud to work with you!” - Elon Musk

While Musk's emails are no guarantee of profitability, it is clearly a possibility. At its current valuation, Tesla would enter the S&P 500 with a top-25 market capitalization among the index if it were to be selected.

Disclosure: Rob Maurer is long TSLA stock and derivatives.

Comments (3)
No. 1-1
Ryan S
Ryan S

Let's take bets on inclusion. I'm assuming it's a yes. Anyone want to take the under on that? :P


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