Given Tesla Motors' (NASDAQ: TSLA) practice of announcing quarterly vehicle deliveries within three days of the end of the quarter, the electric-car maker is due to update investors on the important metric sometime between Sunday morning and Tuesday night. Ahead of its important Model 3 launch next year, will the automaker meet expectations and potentially strengthen investor confidence in the company's ability to keep growing?
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Image source: The Motley Fool.
Here's a look back at Tesla's recent vehicle deliveries, and a look ahead at what to expect from deliveries during the important holiday quarter.
The company's recent growth sets the stage for high expectations in Tesla's fourth quarter.
In its third quarter, Tesla reported surprising growth in vehicle deliveries. Vehicles deliveries soared 114% year over year and 72% sequentially thanks to a sequential rebound in Model S deliveries and a continued production ramp-up of the company's late-2015 launched Model X SUV.
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Data retrieved from quarterly SEC filings for quarters shown. Chart source: author.
Notably, Tesla's third-quarter deliveries helped drive the company's highest year-over-year growth in the key metric in any 12-month period since the second half of 2014. In the trailing-12-month period ending Sept. 30, Tesla's vehicle deliveries were up 66% year over year.
What to expect in Q4
Going into its fourth quarter, management said it expects to deliver "just over 25,000" vehicles. This would represent only about a 1% sequential increase in deliveries, but it would make for a 44% year-over-year jump.
Tesla didn't make guessing its vehicle deliveries very easy in 2016. The company missed its quarterly guidance for deliveries during the first two quarters of the year, and it subsequently reduced its full-year guidance from expectations for 80,000 to 90,000 vehicles to a forecast for about 79,000 units.
And another factor making forecasting difficult is the way the company's quarterly Model S deliveries have bounced around recently, hitting an all-time high above 17,000 in the fourth quarter of 2015 and falling below 10,000 in the second quarter of 2016. While Model S deliveries rebounded significantly in Q3 to 16,000 units, it's not clear whether there is more growth ahead for the luxury sedan.
But despite recent volatility in Model S deliveries, and despite the company's missed targets in the first half of the year, there's still good reason to believe Tesla could meet or even exceed its fourth-quarter guidance. Namely, demand could benefit from Tesla's introduction of self-driving hardware, recent updates to the Model S and X, and increasing Model X production.
Model X in Tesla's factory. Image source: The Motley Fool.
While there are simply too many moving pieces to know exactly how many vehicles Tesla will deliver during its fourth quarter, I believe the company's guidance is reasonable.
Investors will probably be watching Tesla's fourth-quarter deliveries particularly close, since the figure comes as the company is gearing up for its important Model 3 launch late next year. Thanks to plans for high-volume production and deliveries of the Model 3, Tesla hopes to boost its current annualized production run rate of 100,000 units to 500,000 units in 2018. Investors, therefore, will want to ensure that Tesla can hit its smaller targets today, to give more weight to the company's more ambitious Model 3 production and delivery targets.
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