Autos

Tesla shares soar after reporting big beat on second-quarter deliveries

Key Points
  • Tesla shares soared after the automaker said it delivered about 90,650 vehicles in the second quarter.
  • That handily beating Wall Street expectations as the electric car maker's sales withstood the economic downturn better than most competitors.
Tesla Inc CEO Elon Musk speaks at an opening ceremony for Tesla China-made Model Y program in Shanghai, China January 7, 2020.
Aly Song | Reuters

Tesla shares soared in premarket trading Thursday after the automaker said it delivered about 90,650 vehicles in the second quarter, handily beating Wall Street expectations as the electric car maker's sales withstood the economic downturn better than most competitors.

Analysts expected Tesla to deliver about 72,000 vehicles during the last three months, according to a consensus of analysts surveyed by FactSet. A broader set of analyst estimates, compiled by Bloomberg, set higher expectations — 83,000 vehicle deliveries in the second quarter. 

Shares of Tesla zoomed nearly 9% to $1,219.02 in Thursday's premarket, a day after closing 3.7% higher to $1,119.63.

Deliveries are the closest approximation of sales numbers reported by Tesla, and the electric car maker's numbers held up significantly better than its competitors. Tesla's deliveries fell by just 4.8% from the same quarter last year even as auto sales the world over, and especially in the U.S., slumped during the quarter after Covid-19 outbreaks led to health restrictions on households, travel and businesses, mass layoffs and wage cuts. 

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Analyst on what Tesla's Q2 delivery beat means for the stock

General MotorsToyota MotorFiat Chrysler and Ford all saw their second-quarter sales plunge by more than 30% as the coronavirus caused consumers to stay at home and dealerships and factories to shutter.

Tesla said it produced 82,272 vehicles in the three months ended June 30 including 75,496 Model 3 and Model Y vehicles and only 6,326 of its older, higher priced Model S and Model X vehicles. The company did not say how many electric cars it made at its new Shanghai plant versus its US factory in Fremont, California.

It did not break out deliveries by geography, or by model either.

Instead, Tesla reported combined deliveries of 80,050 Model 3 sedans and Model Y cross-over SUVs, and combined deliveries of 10,600 of the older and more expensive Model S and X vehicles. 

The production and delivery data comes a day after Tesla CEO Elon Musk sent out an e-mail congratulating his tens of thousands of employees on their "amazing" execution "in such difficult times."

In the first quarter, Tesla said it made more vehicles than it sold with 102,672 units produced, and 88,400 delivered. During the second quarter of 2019, Tesla said it made 87,048 vehicles including 72,531 Model 3s, and delivered 95,200, including 77,550 Model 3s. 

During the second quarter, Tesla had to close its main U.S. car plant in Fremont, California, for several weeks due to orders from local health officials enforcing coronavirus shutdowns. It slashed pay for salaried workers and delayed giving raises, promotions and bonuses to employees until after a performance review that should be completed by the end of July.

Musk clashed with local health authorities over the restrictions. He also downplayed the severity and prevalence of Covid-19 in the U.S., even though he delayed the company's Battery Day and shareholder meeting until September, citing safety for crowds in the face of the coronavirus.

In the U.S., Tesla also faced two new federal safety probes, one over touchscreen failures in its vehicles, and another regarding a battery cooling system that may pose a fire risk in its older Model S vehicles.

In order to stoke demand for the company's electric vehicles, Tesla cut vehicle prices during the second quarter in North America and China.

Its Shanghai car plant came back online quickly after a coronavirus-related shutdown, however. Sales in China began to recover with the company selling 11,095 made-in-Shanghai Model 3s there in May, according to data from the China Passenger Car Association.

On Wednesday, ahead of its deliveries report, Tesla's valuation edged higher than Toyota's. The American automaker's sales are a small fraction of its Japanese competitor, however. In 2019, Tesla reported deliveries of 367,500 vehicles globally, while Toyota reported sales that were 29 times higher at 10.7 million units.

Tesla had been expected to meet or beat street expectations for quarterly deliveries because Musk has been sending out "Everybody" e-mails to Tesla employees, which signal how the company is doing, and typically leak to press. 

He sent one such e-mail on Wednesday around 11 a.m. PT to Tesla employees with the subject line "Congratulations Tesla Team!." The e-mail said, in its entirety: "Just amazing how well you executed, especially in such difficult times. I am so proud to work with you!"