Want to download what moves Asian markets to your inbox every morning? Sign up here.
The estimated deliveries of electric vehicles from Tesla Inc. in the first quarter they suggest that Chief Elon Musk’s commitment to growth in China and Europe is beginning to bear fruit.
The results marked a strong start to a year in which Musk, the company’s CEO, has global operations to help increase production and sales. Tesla, based in Palo Alto, California delivered 184,800 cars worldwide during the first three months of the year, surpassing the estimated average of 169,850 in a Bloomberg survey of analysts and surpassing the fourth-quarter figure at about 4,000 vehicles.
The neighborhood was “a massive house in the eyes of the bulls,” Dan Ives of Wedbush wrote Friday in a research note. “We believe China and Europe have been particularly robust this quarter, as the trajectory causes Musk & Co. to exceed 850 billion a year, which is well ahead of whispered expectations.”
Musk is stepping into China, which is already the world’s largest automotive market, including electric vehicles, to take a step amid competition from local electric vehicle companies and Volkswagen AG. Car sales are expected to increase in the nation this year for the first time since 2017, and in March, Premier Li Keqiang told the National People’s Congress that the government would help increase the number of EV charging stations and facilities to change the battery.
Tesla’s volume differs from most other carmakers, which show declines primarily in part due to the limitations of electronic chips, Jefferies analysts said in a research note. “Shares should respond well to first-quarter delivery data.”
After a remarkable run in 2020 that saw stock prices rise by more than 700%, Tesla shares fell about 6% this year through April 1st. Friday was a public holiday in the US
“It’s been a brutal sale for Tesla and EVs, but we think it will now be in the rearview mirror,” wrote Ives, who maintained a “neutral” rating of the shares.
“Strong reception”
Tesla has recently upgraded the Model S sedan and the X, an SUV. There is no model S and X vehicles were manufactured in the quarter and only 2,000 were delivered in total.
“We are encouraged by the strong acceptance of the Model Y in China and are making rapid progress towards full production capacity,” Tesla said in a statement. The new Model S and Model X they have also been “exceptionally well received,” the company said, adding that it is in the early stages of large-scale production.
Tesla currently manufactures the Model S i X only at its factory in Fremont, California, and the smaller Model 3 and Y there and at its Shanghai plant. This year he plans to build two more factories, one in Texas and another near Berlin. The company does not separate sales by geography, but the United States and China are its largest markets and almost all sales were Model 3 and Y.
With production in the Fremont factory temporarily Closing in February due to parts supply problems, Tesla’s top-tier Shanghai plant will account for a larger share of volume in the quarter, which should support profitability, Jefferies said in the note.
Chief Financial Officer Zachary Kirkhorn warned in January that production would be low due to the transition to renewed products, while global semiconductor shortages and delays in ports were also expected to affect the quarter.
Tesla said its delivery count should be seen as somewhat conservative and that final figures could vary by up to 0.5% or more.
The quarterly delivery figure is widely seen as a barometer of demand for both Tesla vehicles and consumer interest in electric vehicles around the world, as legacy carmakers launch their own electric cars.