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

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

Tesla shares soared in pre-market trading Thursday after the automaker said it delivered 90,650 vehicles in the second quarter, handily beating Wal

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Tesla shares soared in pre-market trading Thursday after the automaker said it delivered 90,650 vehicles in the second quarter, handily beating Wall Street expectations.

Analysts expected the electric car maker to delivery 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 Wall Street expectations for Tesla higher at 83,000 vehicle deliveries in the second quarter. 

Shares of Tesla closed Wednesday up 3.7% to $1,119.63. The company’s stock jumped by about 10% in pre-market trading.

The deliveries come 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 of 2020, 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. 

Deliveries are the closest approximation of sales numbers reported by Tesla.  

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. 

During Q2, Tesla had to close its main U.S. car plant in Fremont, California for several weeks due to health orders. 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 famously clashed with local health authorities over Covid-19 restrictions on the Fremont plant. 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 novel coronavirus.

In the US, Tesla also faced two new federal safety probes, one over a problem with its vehicle displays, and another over a cooling system in its older Model S vehicles which may pose a fire risk.

In order to stoke demand for the company’s electric vehicles, Tesla cut vehicle prices during Q2 in North America and China both.

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 predecessor, however. In 2019, Tesla reported deliveries of 367,500 vehicles globally, while Toyota reported sales that were twenty nine times higher at 10.74 million units.

Tesla was expected to meet or beat street expectations for Q2 deliveries, in no small part 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. California time 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!” 

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