Tesla has been grappling with deliveries as the second quarter comes to the close, drawing an apology to customers, and – thanks to its logistics partners – also from CEO and co-founder Elon Musk.
Tesla’s Fremont factory, where its Model 3 and Model Y are both made, has opened again after shutdowns forced by the Coronavirus pandemic, and now the electric vehicle maker is working hard to ramp deliveries to boost final sales numbers before the end of the quarter, as it usually does.
Musk acknowledged on mid-Thursday (Australian time) that changing delivery dates are being experienced by customers as the end of June approaches rapidly.
“Apologies to Tesla customers for shifting delivery dates. It’s a crazy world out there!” Musk said on Twitter.
“Special thanks to Tesla trucking & rail partners for figuratively & literally going the extra mile,” he said.
Special thanks to Tesla trucking & rail partners for figuratively & literally going the extra mile
— Elon Musk (@elonmusk) June 25, 2020
Tesla electric vehicle stock is clearly being replenished since the lockdown, but the ramp up of deliveries comes after a slump in registrations as reported in mid-June.
According to data from automotive industry tracker Dominion Enterprises as first reported by the Wall Street Journal, Tesla registrations (and therefore deliveries) tumbled by 37% in California – where half of all electric vehicles in the US are registered – in March and April, and 70% in May (as reported by Electrek). Across the US, Tesla registrations fell by 30%.
According to the data from Dominion Enterprises, 6,260 Tesla vehicles were registered in California in April, and 1,447 in May.
In Australia, a hiatus in shipping due to the pandemic ended in June, and according to Tesla VIN tracker @Vedaprime, Tesla is now ramping up deliveries of (largely) Model 3 sedans cutting time from ship to customer from 3 weeks down to 7 days.
Impressive as cars clear customs, port, prepped, detailed, transported, deliver
Debussy carshave also arrived in Brisbane last night for delivery next week. Normally this is 2.5 – 3.5 week from arrival.
— VedaPrime (@VedaPrime) June 19, 2020
Tesla reported its best ever first quarter sales (ergo, deliveries) in the first quarter of 2020 despite the March slowdown due to the virus, with around 88,000 vehicles delivered.
While Tesla’s Shanghai Gigafactory was able to open again well ahead of Fremont, it is unlikely that, by end June, Tesla will achieve anywhere near half the 500,000 sales it said in January it could “comfortably exceed” for 2020: even with Model Y production now ramping up, deliveries for this quarter are expected to come in around the 50,000-60,000 mark.
While the fall in registrations was not unexpected according to Dominion Enterprises, analysts are divided on whether the recent stock rally that saw Tesla claim the title of the world’s most valuable auto maker will hold.
Tesla surpassed the value of Toyota earlier in June after Musk confirmed a leak that he said in an email it was time to put the Tesla Semi into volume production.
Stocks skyrocketed to $US1,025.05 ($A1,470.43 at the time), and are now sitting at $US960.85 ($A1,399.96) as of trading close on Wednesday (US time).
Morgan Stanley on Monday dropped its price target to just $US650, with analyst Adam Jonas stating in a note on that he believes the $US1,000 per share valuation ignores a “host” of risks, according to Business Insider.
“We understand the attraction of the Tesla story,” Jonas was quoted as writing. “We think investors may have a chance to revisit the stock at a more attractive price.”
However at Wedbush it is Tesla’s performance in China that will see it continue to hit delivery targets.
“Right now the key to Tesla’s stock remains the staggering China growth rebound which is paramount to the company’s overall goals to hit one million delivery vehicles annually in a few years,” Wedbush Securities analyst Dan Ives said in a note to clients on Wednesday, according to Business Insider.
“We continue to believe EV demand in China is starting to accelerate with Tesla competing with a number of domestic and international competitors for market share with Giga 3 remaining the linchpin of success which remains the prize that Musk and Tesla are laser focused on capturing.”
Tesla bull Cathie Wood, of Ark Invest which in February posted a 5-year $US7,000 price target for Tesla, continues to see a much broader horizon for the EV pioneer.
“There’s an awakening in this market,” Wood said in a recent interview with Market Watch regarding the impact of Coronavirus on markets that Ark Invest advises on.
“If you looked at Tesla a year ago it had been trashed by hedge funds and many others, saying it is going to run out of cash.
“From one year ago when the stock got down to the $170s, to now, it just crossed $1,000, what you will see is that the balance sheet everyone was criticizing last year, today looks like a fortress compared to the balance sheets of traditional auto manufacturers,” Wood said.
“Traditional manufacturers are in trouble,” says Wood.
“We’ve been trying to get that message out for a long time. Tesla was going to disrupt the traditional manufacturers which would have to make a number of great leaps to catch up. In fact, they’ve had to cut back on their investments. They haven’t succeeded in switching from the traditional internal combustion engine. They can’t get up to Tesla’s standards.”
Indeed, it is Tesla’s head start on autonomy – that Tesla says it is accelerating rapidly via 1 million real world data points a month (as of April) from its drivers – that Wood sees as the big driver of Tesla’s value.
“We’ve seen Tesla moving toward autonomous. Artificial intelligence is a big part of that. I think that analysts are beginning to get it,” says Wood.
“It’s less auto analysts and maybe analysts who are more technology-oriented. This is going to be one of the biggest investment opportunities of our lifetime,” she said.
Bridie Schmidt is lead reporter for The Driven, sister site of Renew Economy. She specialises in writing about new technology and has been writing about electric vehicles since 2018. She has a keen interest in the role that zero emissions transport has to play in sustainability. She has participated in podcasts such as Download This Show with Marc Fennell and Shirtloads of Science with Karl Kruszelnicki and is co-organiser of the Northern Rivers Electric Vehicle Forum.