Will future quarters meet Tesla's Q2 2019 record?
After a disappointing first quarter that saw yields fall by 31% over the previous quarter, Tesla was well again and remained on track in the second quarter of 2019.
Tesla broke all time-registered delivery time in the fourth quarter of 2018 by delivering 95,200 units in the second quarter of 2019. What is even more encouraging, the electricity producer sold a reasonable 17,650 Model S and Model X during this period.
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TESLA's Q2 YOY
Source: Tesla (via Motley Fool / Daniel Sparks)
There is not much to worry about with regard to model 3 sales growth over the next many years. For this purpose, I see four main reasons to be sure of the Model 3's long-term future:
- Model 3 is the cheapest Tesla to date.
- There is still room for growth in North America.
- Tesla has just started selling Model 3 in Europe and China, two markets with great potential for an electric electric sedan at the entry level.
- And the rest of the world is expanding after Tesla reaches stable sales in North America, Europe and China.
But the same cannot be said of Model S and Model X.
The flagship models are higher prices, and Tesla has built them for years, translating into better margins in economic terms. But both of these models are aging. Although Tesla insists (rightly), these cars are improved, it cannot deny that Model S could use a cosmetic refreshment in and out.
Tesla will continue to deliver Model S and Model X at reasonable levels. At least, the company must target close to 2018 delivery records of 99,475 units. With the production capacity already in place, it would not make much sense to allow Model S and Model X deliveries to fall.
Tesla will keep cash flows from Model S and Model X sales until Model 3 production reaches higher levels. And even after that there is no need for Tesla to release its grip on the luxury segment. Until today, Mercedes S-Class remains a benchmark for luxury and has become a great symbol of Mercedes, which reinforces the brand's cache.
Tesla should look at Model S just as Mercedes looks at its S-Class.
Tesla has arrested the downward spiral it was on since the beginning of the year, but this time the panic was not entirely unfounded. Many investors were really worried about Tesla's ability to deliver strong growth after reporting quarterly sales figures, further boosted by the $ 702.13m loss. $ During the period.
The best way to solve these concerns was to get back to the basics: delivering more cars. That's exactly what Tesla did in the second quarter and delivered 95,200 units, which is 4.9% more than Tesla's previous all-time high (90,700 units in Q4 2018) and a full 51% higher than the first quarter 2019.
Although the market expects some confirmation from Tesla's financial reports in Q2 2018, such as cash balance, model 3 gross margin and whether Tesla reports a loss or profit in the quarter, the odds are quite high for the stock to remain on its current upward trend.
Author Bio: Shankar Narayanan is the editor of 1redDrop.com. Has an MBA from Kent State University and an engineering degree from Madurai Kamaraj University. He has been an active contributor to the best financial sites like SeekingAlpha and GuruFocus, and has a sense of speaking business, finance and technology.
- Editor's Note: EVANNEX, which also sells aftermarket gear to Teslas, has allowed us to share some of its content with our readers for free. Our thanks go to EVANNEX. Check the website here.