Tesla Inc’s early-year deliveries fell less than expected from record levels reached late last year, winning support from investors who pushed the shares 14 percent higher in pre-market trading yesterday.
Tesla handed over 88,400 vehicles worldwide in the first quarter, down 21 percent from the final three months of last year, but the total beat analysts’ average estimate for about 78,100.
The automaker’s stock was priced at US$516.21 in premarket trading, up from a close of US$454.47 in New York.
Photo: Reuters
“I’m shocked they did so well,” Gene Munster, managing partner of venture capital firm Loup Ventures, said by phone. “I don’t know how they did it. They had every excuse in the world to put out a bad number.”
Musk, 48, tried to salvage as much business as possible last month by introducing “touchless” deliveries at a time when authorities around the globe are urging would-be car buyers to shelter in place. While Tesla managed to deliver more vehicles than same quarter last year, the improvement was small considering the company added a new product — the Model Y — and opened an assembly plant in China.
Tesla did not give an update on whether it still expects to deliver at least 500,000 vehicles this year.
Analysts anticipate Tesla would sustain a significant blow along with all other automakers from the spread of COVID-19. With a global recession increasingly likely, consumers are expected to be less interested in making big-ticket purchases like new vehicles even once they are able to leave their homes.
The vehicles delivered in the quarter include the first Model Y crossovers that started reaching customers in the middle of last month.
Musk has predicted it would be a big seller, potentially eclipsing the combined volume of all other vehicles in Tesla’s lineup: the Model 3, S and X.
Tesla did not say how many vehicles it built during the quarter at its plant near Shanghai, which started production late last year. While the company suspended output when measures to contain the coronavirus forced plant closures across China, government authorities bent over backward to help the company reopen quickly.
“The production number was very good, especially with what was going on in China,” Robert W. Baird analyst Ben Kallo said of the 102,672 vehicles Tesla built in the quarter.
Kallo said he is not bothered by the company neglecting to update its 2020 forecast.
“It shows they don’t have visibility in this environment. Saying nothing is better than saying something at this point,” he said.
Tesla’s lone US assembly plant in Fremont, California, stopped production on March 23 after days of back-and-forth with city and county officials. San Francisco Bay area health authorities have since extended “stay-at-home” orders to at least May 3.
Tesla delivered about 14,000 fewer cars than it produced in the quarter, meaning the automaker built inventory.
Musk warned in July last year — long before the coronavirus outbreak — that the first quarter of this year would be “tough.”
Tesla’s vehicles are no longer eligible for federal tax credits in the US, and buyers also are getting less-generous support from the Netherlands, a market that contributed to record fourth-quarter deliveries.
“I view it as a small victory during a dark time,” said Dan Ives, a Wedbush Securities analyst who rates Tesla a hold.
“The devil is in the details and the big question is around 2Q cash burn given this unprecedented, treacherous environment,” Ives added.
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