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Tesla Reports Record Q2 2019 Deliveries Quelling Fears Regarding Demand Of Model 3

Tesla Inc. (NASDAQ:TSLA) blew past expectations with record deliveries in the second quarter of 2019 and in the process settled concerns regarding the demand for the Model 3 sedan. The electric-car maker delivered around 95,200 vehicles in the period thus exceeding Wall Street estimates and setting a new record of deliveries in a quarter.

Record deliveries in Q2 2019

The delivery numbers of the company in Q2 2019 were subject to scrutiny considering the company had unconvincing deliveries in Q4 2018 and Q1 2019 where it saw a 31% drop in deliveries. The electric-car maker has laid blame on seasonal demand and delivery logistics issues. However, some have argued that demand for vehicles has been lower than the expected estimates.

There is a growing demand for the Model 3 sedan judging from the new delivery record considering they made up around 81% the Q2 2019 vehicle deliveries. Before announcing the record deliveries in the quarter Elon Musk has been on twitter promoting a program dubbed “Tesla Direct” which gives Model 3, S, and X buyers the option of having the car delivered to their office or home

Loup Ventures managing partner Gene Munster indicated that there was fear among investors that those individuals who wanted electric-cars had already purchased one and that deliveries were likely to continue to decline. However, the record production and deliveries of the Model 3 are likely to shake off those fears.

Home deliveries to drive growth momentum

The Tesla Direct service is expected to help the company maintain growth momentum in the coming quarters. The home delivery approach is not a surprise considering the company’s retailing strategy has always been unique from the start and the selling of cars directly to consumers enables the company to have the flexibility and try new approaches.

The impact of the record deliveries will be seen once the company releases Q2 earnings report. In may the company raised $2.7 billion and the company is working on other promising projects like the Shanghai factory that will reduce costs of imports to China as well as the introduction of the Model Y SUV in future.

Published by Ruchi Gupta

Swati Goyal has over 6 years of experience in financial research & analysis domain. She has built financial models varying from consumer goods to banks. She has her articles published in leading dailies of the nation

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