Could Tesla Exceed Its Delivery Guidance for 1st Half of 2017?



Tesla’s 1Q17 surprise

Tesla (TSLA) pleasantly surprised investors by delivering more than the expected vehicles in the first quarter of 2017. It reported deliveries of about 25,000 vehicle units in 1Q17, a rise of ~69.0% YoY (year-over-year).

Tesla’s vehicle production rate also took a big leap in 1Q17. It produced 25,418 vehicle units, a 64.0% rise from the 15,510 vehicle units produced in 1Q16.

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1H17 guidance

During Tesla’s 4Q16 earnings event, management guided for deliveries of 47,000–50,000 vehicles in the first half of 2017. That would be a YoY deliveries growth of 61.0%–71.0% for that period.

To reach the higher range of that guidance, Tesla would need to maintain the same pace of vehicle deliveries in 2Q17 as it had in 1Q17. If we look at Tesla’s QoQ (quarter-over-quarter) deliveries growth in the last year, this guidance doesn’t look too difficult to achieve.

However, Tesla needs to continue ramping up and retooling its production facilities in 2Q17 in order to start its production of Model 3 in the second half of the year. The company is expected to start delivering its first mass-market electric vehicle, the Model 3, in the send half of 2017. During its 4Q16 earnings event, management remained optimistic about the launch of Model 3 and its solar roof products, scheduled for the second half of 2017.

Tesla stock is soaring

On April 10, 2017, Tesla stock ended the session at its all-time high of $312.39. With this, the stock has risen about 46.0% on a YTD (year-to-date) basis. Stronger-than-expected 1Q17 deliveries and production figures along with investors’ high expectations for the company’s 1Q17 earnings could be two primary reasons for the optimism on Wall Street.

Now it becomes more important for Tesla to maintain its high margins in the coming quarters and keep investor optimism alive. Interestingly, Tesla’s annual vehicle production is still just a fraction of the annual vehicle production of mainstream automakers (XLY), including General Motors (GM), Ford (F), and Toyota (TM).

Read Tesla Stock: What to Expect after Early April Rally to see what analysts are recommending for Tesla stock.

You can also read Autonomous Vehicles: Latest Updates in 2017 to find out about automakers and technology companies’ efforts to make autonomous vehicles a reality.


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