Tesla Exceeds Expectations with its Q1 Results

Tesla Exceeds Expectations with its Q1 Results

Tesla released its first-quarter vehicle production and delivery numbers for 2021. The US auto manufacturer delivered 184,800 vehicles and produced 180,338 cars. These figures exceeded analysts and market expectations for Tesla to deliver around 168,000 units.  

The Q1 deliveries beat Tesla’s previous record of 180,570 deliveries in Q4 2020.

The latest figures include production of the Model 3 sedan and Model Y crossover SUV but the EV carmaker didn’t produce any of the high end Model S sedans and Model X SUVs. It only delivered the expensive models from current inventory that made up only 1% of the quarterly figures.

In Tesla’s released statement, the company stated that “with the new equipment installed and tested in Q1 and we are in the early stages of ramping production.”

Tesla’s Technoking said in the company’s 2020 Q4 earnings call that “We have been able to bring forward the Plaid Model S and X – Model S will be delivered in February and Model X a little later.” This is the luxury sedan that is expected to accelerate from 0 to 60 miles per hour in under 2 seconds with seating for 7 people.

However, Tesla has had to face obstacles with production this year such as a fire at the Fremont factory, temporary closures due to the global chip shortage, as well as the ongoing effects from the pandemic.

Compared to Q1 2020, the latest figures are over 100% increase but just over a 2% increase from last year’s Q4 results.

During the 2020 earnings call in January, the Technoking and Tesla’s Master of Coin, Zach Kirkhorn weren’t specific when giving guidance for this year’s deliveries and said they would provide more clarity in Q2. It was a cautious move considering the impact there’s been on production in the last 3 months.

Many analysts are saying that Tesla no longer holds its unique position in the EV industry but the automaker’s shares spiked 7% when trading opened on Monday. Investors were elated with the share price increase credited to the production and delivery figures that beat market estimates.

This indicates there is still global demand for Tesla vehicle and it will continue to grow as the US manufacturer continues to release new products. It’s highly possible that Tesla will surpass the delivery figures from last year regardless of supply chain issues hampering the automotive industry.

Tesla will also see a boost from US President Joe Biden's recent announcement to increase electric vehicle incentives and charging stations. If the US Congress approves the $2.3 trillion infrastructure plan, it would be a big push for EV manufacturers.

Currently there are over 280 million vehicles on the road in the US and only 0.36% are all-electric. It is estimated that it will take 15 years or so to get all US cars to battery power but with every EV that replaces a gas powered vehicle, it helps in reducing emissions and is a net positive for the global environment.

The Biden administration hasn’t provided detail on how much car buyers will get to trade-in their gas vehicles but consumers are expected to see incentives such as a tax credit for those who buy preowned electric vehicles as well as big discounts for buying USA-made EVs.

The infrastructure investment in charging stations will address concerns that typically make consumers wary about transitioning to electric vehicles. These are all great indicators that a large investment will certainly promote positive changes in transport electrification. Musk has also been a big supporter to accelerate the use of sustainable energy and a big step by government is just what the EV industry needs to pick up the pace in the right direction.