Tesla (TSLA) has a “chance” in a “record quarter of vehicle deliveries,” according to CEO Elon Musk in a leaked email to employees.
The end of the quarter is approaching and as usual, Tesla is in the middle of a series of deliveries in order to improve its financial statements for the quarter.
Unlike other automakers, Tesla has the entire distribution system – meaning it owns every car until it is delivered to customers.
This has a huge impact on the automaker’s financial statements because it cannot recognize revenue until the cars are delivered and the money is spent up front to make those vehicles.
This results in Tesla aggressively pushing each quarter to reduce its inventory and deliver as many vehicles as possible at the end of the quarter.
In a new employee email sent today and obtained by Electrek, CEO Elon Musk told employees that with “all hands on deck,” they can achieve record deliveries.
However, the CEO indicates that he will require them to have the most vehicles per day to deliver what they have ever had:
“We have a chance to achieve a record quarter of delivery, but we have to mobilize aggressively to achieve that. This is the most number of vehicles we want to offer in a day.”
There were earlier quarters when Tesla delivered 30% of the quarter cars in full during the last week of the quarter.
Musk added in the email:
“Please make car delivery a top priority. It’s also important that we keep factory production as high as possible for the remaining 10 days. This is vital to the California market.”
Tesla’s last record deliveries were 112,000 cars delivered during the fourth quarter of 2019.
While “standard deliveries” appear to be a good thing, Tesla was expected to deliver more vehicles during the fourth quarter.
The consensus estimate of Tesla’s third-quarter delivery from Wall Street analysts was 121,000 cars as of last week.
Last quarter, Tesla delivered 90,000 cars, but its inventory was severely affected by the plant shutdown due to the epidemic.
The results were considered positive given the circumstances.
Take an electric
As usual with the emails Elon sent to the staff, he left room for translation and did not go into details as he knew these emails would eventually leak.
But it looks as if Tesla has beaten the previous delivery record, it will be tight.
It will place shipments between 110,000 and 115,000 cars.
That would be lower than expected based on most estimates in the quarter.
The reason behind this is still not clear to me, but the expectations for Chinese deliveries are probably too high.
Tesla revealed a production capacity of 200,000 vehicles at its Gigafactory Shanghai plant in the last quarter.
It led us and many more people that China could contribute close to 50,000 vehicles in the third quarter, but that was probably overly optimistic.
Either way, Tesla’s new record of deliveries in current economic conditions remains impressive even if deliveries fall short of estimates of a few thousand vehicles.
What do you think? Let us know in the comments section below.
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