CEO and founder of electric carmaker Tesla has told staff in an internal email that with maximum effort, an all-time delivery record can be achieved by the end of this quarter.
A delivery record for the second quarter of 2019 has been in the sights of the Tesla founder since the carmaker posted a loss for the first quarter in April.
The Q1 loss was attributed to the company’s expansion of its successful and cheaper Model 3 into China and Europe, in what Musk described in a Q1 earnings call as logistical “insanity” which saw half of global deliveries being finalised in the last 10 days of the quarter.
At the time, the CEO noted that “regional balancing” was needed to ensure the carmaker could overcome the logistical issues associated with
At the June investor’s day, the CEO assured shareholders that the carmaker had a “decent shot” at turning the ledger sheets around, coming close to, if not surpassing, its previous record in Q3 2018 (Tesla does not record a sale as fulfilled until the vehicle is delivered).
But there has been some doubt in certain circles, not least among short-sellers of Tesla stock, that this goal can be achieved.
Musk has countered this in an internal note sent to staff on Tuesday (US time) to staff and seen by Bloomberg.
“There is a lot of speculation regarding our vehicle deliveries this quarter,” Musk told employees.
“The reality is that we are on track to set an all-time record, but it will be very close. However, if we go all out, we can definitely do it!”
It does suggest that with just says left in the quarter, Tesla must be somewhere near to that goal.
A little over 63,000 deliveries for Q1 2019 recorded by the EV maker, while its forecast for Q2 is 90,000 – 100,000 deliveries.
It’s best record for deliveries, to date, was in Q4 2018 when the company reported it has delivered 90,700 vehicles.
Not only is it now well into deliveries in both China and Europe, it has also launched in several right hand drive markets including Australia, with UK deliveries commencing last Friday (UK time).
Tesla has already sold enough vehicles to record a profit – but only if those vehicles are delivered.
With a global market to contend with, getting the right car to the right place can be a challenge, as no doubt legacy carmakers can also attest.
“We already have enough vehicle orders to set a record, but the right cars are not yet all in the right locations,” Musk wrote in the note to staff.
“Logistics and final delivery are extremely important, as well as finding demand for vehicle variants that are available locally, but can’t reach people who ordered that variant before the end of the quarter.”
The desire to solve this global puzzle is even taking priority over Musk’s own birthday, if this response via Twitter is anything to go by:
Working on Tesla global logistics
— Elon Musk (@elonmusk) June 26, 2019
Financial analyst at Goldman Sachs, David Tamberrino, has warned that while deliveries may surpass the low end of the company’s forecasts for the second quarter, the pace may not be sustainable.
With the U.S. federal tax credit for Tesla electric cars halving to $1,875 from July 1, US sales at least may take a downturn.
“We believe a downward path for shares will resume as it becomes more clear that sustainable demand for the company’s current products are below expectations,” Tamberrino wrote in a report last week according to Bloomberg.
While it has indeed been the “mass-market” Model 3 that has driven sales for the carmaker in the last few quarters, it is by no means the last model planned by the carmaker.
The Model Y, the SUV equivalent of the Model 3 sedan, is planned to join the Tesla family in the northern hemisphere autumn of 2020, and Musk has said that he is planning to unveil the “cyberpunk” Tesla ute (or pickup) later this year.
Nor has the carmaker commenced deliveries into right-hand drive markets other than the UK – deliveries are expected to start in Australia this coming August.