Tesla Delivery To Miss Q2 Target, Still 121% Growth

There’s a pretty good chance Tesla Inc. will deliver at least 90,000 of its electric vehicles (EVs) in the second quarter which, while short of analysts’ expectations, will still be a huge 121 percent year-over-year increase.

Some analysts, however, continue to remain skeptical of Tesla’s promise to deliver 100,000 EVs in Q2 when the company only delivered 63,000 EVs in the first quarter. Tesla also delivered 90,700 vehicles in the fourth quarter of 2018 -- its best performance yet.

The large slump in deliveries and production in Q1, plus a drop in demand, led some analysts downgrading Tesla’s stock and predicting the company’s takeover by a tech firm such as Apple or even Amazon. A recovery of sorts by the stock over the past two weeks has muted further criticism of Tesla and caused the stock to recover somewhat.

A number of analysts expect Tesla's Q2 deliveries to wind-up anywhere from 89,500 and 92,000 units, which they say is astounding given Tesla competes in one of the most capital-intensive industries in the world. This compares with Tesla’s guidance estimating Q2 deliveries ranging from 90,000 and 100,000 EVs.

Deliveries at the low end of Tesla’s guidance (or 90,000 EVs) will still mean a massive 121 percent year-over-year growth. This will also mean a significant jump in deliveries for consecutive quarters and year-on-year. In addition, production of the Tesla Model 3 has continued to rise since the second quarter of 2018.

In an email to Tesla employees on May 22 email, CEO Elon Musk said current delivery trends show the company has "a good chance of exceeding" the record deliveries in Q4 2018.

Musk again told investors during Tesla’s June 11 shareholder meeting the company has "a good shot" at achieving record deliveries during Q2. "If not, it's going to be very close," he noted. Tesla’s Q2 numbers will be revealed sometime between July 1 and July 3.

Beyond quarterly production and deliveries, the bigger issue is Tesla’s annual production for 2019. Tesla’s guidance sees total production for the year ranging from 360,000 to 400,000 EVs. Tesla hasn’t doubled down on this guidance, which leads some analysts to question why.

The uncertainty has led to widely differing assumptions about the fate of Tesla’s stock among Wall Street analysts. Ben Kallo, analyst for investment bank Robert W. Baird & Co., raised his price target on Tesla to $355 from $340.

On the other hand, Philippe Houchois, analyst for Jefferies Group LLC, cut his price target to $300 from $400. Goldman Sachs earlier issued a bearish report on Tesla and seconded its original sell rating.