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Will Tesla Beat Its Q4 Delivery Estimate?


Jan. 2 2020, Published 7:37 a.m. ET

Tesla (TSLA) stock had a fantastic fourth quarter and the stock rose 74%. The company will release its fourth-quarter delivery numbers soon. While some analysts expect the company to beat the guidance, others expect it to falter. With expectations running high, we’ll analyze how the company performed in the fourth quarter.

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Expectations from Tesla’s Q4 deliveries

Tesla, in its third-quarter update letter, said that it would exceed the lower end of the guidance range of 360,000–400,000 deliveries in 2019. In the first nine months of the year, the company delivered 255,561 units.

In order to exceed 360,000 units, Tesla should have delivered 104,440 or more units in the fourth quarter. At 104,440 deliveries, the company would see a 7.5% sequential increase and 14.8% year-over-year growth in the quarter.

In the third quarter, Tesla missed its delivery expectations. The company recorded 97,816 deliveries, which fell short of the estimate of 99,000. A month before Tesla’s third-quarter delivery report, analysts had lower estimates for the company’s third-quarter deliveries. However, a leaked email showed that CEO Elon Musk was aiming for a record 100,000 deliveries in the quarter. As a result, analysts raised their estimates. To learn more, read Tesla Q3 Deliveries: Curious Case of Analysts’ Estimates.

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Cowen expects Tesla to miss Q4 delivery guidance

Cowen analyst Jeffrey Osborne expects the company to miss its yearly guidance, according to a Bloomberg report. Osborne expects Tesla to post 356,000 deliveries in 2019 and marginally miss its guidance. In the fourth quarter, Osborne expects the company to post 101,000 deliveries, which is below the required 104,440 units.

Earlier, Osborne expected 95,000 deliveries in the fourth quarter. He raised his forecast due to strong demand in the Netherlands and China. However, he expects lower demand in other regions. Osborne expects the demand in matured markets to soften.

In the fourth quarter, he expects Model 3 demand to be weak. According to Bloomberg, Osborne wrote in a note that “Excluding the Netherlands and China, we expect Model 3 deliveries to be down” compared to the previous quarter and the same period the previous year.

Strong demand in the Netherlands and China

In the fourth quarter, Tesla focused on the Netherlands to satisfy the region’s high demand. The EV interest in the area rose at the end of the year due to the expected rise in the BIK (benefit-in-kind) tax.

The Dutch government plans to reduce the incentives for EVs by 2026. The government’s BIK tax was 4% higher to a maximum of 50,000 euros in 2019. The BIK tax will likely increase to 8% in 2020. Eventually, the BIK tax will increase to 22% in 2026.

In the fourth quarter, according to EU-EVs data, Tesla’s Model 3 was the highest registered EV in the Netherlands. The company registered 16,288 Model 3s in the fourth quarter in the region. Also, Tesla registered 316 Model S units and 272 Model X units in the quarter.

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In China, Tesla’s Model 3 was added to the list of recommended EVs for NEV (new energy vehicles) subsidies. However, China has been reducing NEV subsidies. While China has rolled back subsidies for NEVs with a range of less than 250 kilometers, it has almost halved subsidies for higher range vehicles.

Media reports are bullish on estimates

Several media reports have indicated their calculations and estimates regarding Tesla’s fourth-quarter deliveries. According to a report from ClenTechnica, author Maarten Vinkhuyzen expects Tesla to deliver 118,000 vehicles in the fourth quarter—way higher than the required 104,440 units. The report also said, “2019 Tesla deliveries are likely between 370,000 and 380,000.”

Analysts’ expectations

Wall Street analysts’ expectations vary for Tesla’s fourth-quarter deliveries. However, the company will likely post a record delivery number. Tesla hustled quite a bit in the quarter. Today or tomorrow, we’ll likely know if the company was able to beat the crucial 104,440 unit mark.

Tesla has its growth drivers in place. Despite a marginal miss or beat, the company is looking at a robust 2020. The main earnings boosters in 2020 are ramping up Model 3 in China and starting Model Y in Fremont. Read How Is Tesla Stock Positioned for 2020? to learn more.


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