Tesla has always been focused on setting records and the technological bar in the automotive market. But this means Tesla’s expectations are extremely high and seemingly impossible. With pressure to sell more cars than last year, Tesla has been ramping up production all over the world. This year’s third-quarter production numbers are in and with record-setting sales, Tesla is selling more than ever before. But is Tesla meeting the expectations of its shareholders, the industry, and the world?
Record-setting sales for Tesla
The third quarter of 2019 proved to be successful for Tesla, which set records for production and deliveries. The innovative automaker reported a total of 97,000 vehicles delivered globally through the third quarter of 2019. This is an increase over the previous record of 95,356 vehicles in the second quarter, according to The Verge. In addition, Tesla set a production record of 96,155 vehicles.
A breakdown of Tesla sales is as follows:
- Model 3: 79,600
- Model S/Model X: 17,400
These numbers put to rest the concern many shareholders and experts have had over Tesla’s ability to grow in sales. Concerns included Tesla’s ability to establish a new presence in newer Chinese and European markets, as well as the possibility of the demand for the Model 3 being exhausted in North America, but both were proven false by Tesla’s continuous ability to set records.
How Tesla sales numbers stack up against expectations
According to InsideEVs, “several combined analysts” estimated that Tesla sales would average 98,250 vehicles. This means that the 97,000 falls just short of the estimate and also falls below CEO Elon Musk’s own goal of 100,000. The sales number even falls short of Wall Street‘s expectations of 99,000 deliveries. But Musk still believes that Tesla can set another new record in the fourth quarter, in order to meet the company’s record estimate for the year. Without reaching goals for the third quarter, Tesla may struggle to meet year-long expectations.
Hours after the sales numbers were announced, Tesla’s stock fell by more than 3%, proving that Tesla’s struggle to meet its year-end goals will be a tougher hurdle than expected. Tesla deliveries are watched extremely closely and with high expectations. The sales number works as a barometer for how Tesla is performing before it releases its actual quarterly earnings. Without meeting protected delivery numbers, earnings are expected to fall short as well.
Tesla’s reaction to sales and future plans
Though Tesla may lag behind the estimates, it looks towards a bright future. According to CNBC, Tesla is entering the fourth quarter of 2019 with an increase in its order backlog, after achieving record net orders already in the third quarter. The company expects deliveries by the end of the year to average between 360,000 and 400,000 vehicles, which would be up to a 65% increase from 2018. And with a delivery increase of 16.2% from the third quarter of 2018, it could still be possible. In order to reach the automaker’s goals, the fourth quarter will need to bring in record sales numbers as well.
Why record-setting sales could still equal a loss for Tesla
While Tesla did achieve record sales in the third quarter of 2019, it still falls behind the expectations of Tesla shareholders. Struggling to meet Musk’s strict deadlines and expectations, Tesla will be reportedly suffering from “an adjusted loss of $0.16 per share on sales of $6.3 billion in the third quarter,” according to Teslarati. While this is better than the expected loss of $0.45 per share on sales of $6.6 billion in the second quarter, a loss is still a loss.