How many cars Tesla can deliver

How many cars Tesla can deliver


  • Tesla will report its third-quarter vehicle deliveries during the first few days of October.
  • Deliveries fell sequentially in Q2 as the company endured production challenges.
  • A strong second half of the year is likely for Tesla’s vehicle production and deliveries.

The electric-car maker should post strong sequential and year-over-year growth.

As the end of the third quarter approaches, one quarter-end report that usually gets quite a bit of attention is Tesla‘s (TSLA -2.57%) update on vehicle production and deliveries. The electric-vehicle (EV) maker typically reports its quarterly deliveries two to three calendar days following each period’s end.

Investors will likely be watching Tesla’s Q3 update on vehicle production and deliveries extra closely since the automaker suffered a tough second quarter. Due to a temporary shutdown at the company’s Shanghai factory earlier this year, deliveries fell 18% sequentially in Q2. Investors are likely hoping for sharp sequential growth in Q3, as well as impressive year-over-year growth.

Expect a huge jump in production

While a steep sequential decline in Q2 deliveries might fool some investors into thinking Tesla’s business is facing dire circumstances, this couldn’t be further from the truth. Investors should zoom out. While deliveries were down 18% sequentially, falling from about 310,000 in the first quarter of 2022 to just under 255,000 in Q2, they were up 27% year over year.

Stepping back to look at the company’s momentum over the trailing-12-month period does an even better job of capturing the company’s impressive execution on its growth plans and the surging demand for Tesla’s EVs. Trailing-12-month deliveries for the period ended June 30, 2022 soared 58% year over year.

While this overarching sales trend and Tesla’s recent history of execution increase the odds of continued strong growth going forward, there are some specific reasons why Q3, in particular, should be good for Tesla. First and foremost, management said in Tesla’s Q2 letter to shareholders that the company produced a record number of vehicles at its two main factories (one in California and one in Shanghai) in the final month of the year.

This momentum gave the company confidence to guide for “a record-breaking second half of 2022.” Furthermore, management said in Tesla’s Q2 earnings call that it expects total production to increase about 50% this year. This would require accelerated production levels in the second half of the year.

As another underlying catalyst, Tesla started ramping up production at two entirely new factories earlier this year. These factories — in Germany and Texas — should begin contributing materially to the company’s production volume during the second half of the year.

What about demand?

With strong production seemingly in the bag for Q3, how will sales fare? Another part of the equation investors must consider before they can make an educated guess about sales is demand, right? But anyone following Tesla closely knows this isn’t a concern, either.

Tesla CEO Elon Musk and CFO Zachary Kirkhorn both asserted in the company’s recent earnings call that demand simply isn’t an issue for the company. This is because lead times on deliveries of new vehicle orders are so far out.

Put another way, demand exceeds supply by a wide margin. U.S. orders today of the base version of Tesla’s Model Y, for instance, won’t be delivered until sometime between December of this year and April of next year, according to the company’s website.

With all of this said, it seems highly likely that Tesla’s Q3 deliveries will hit a record level, likely passing Q2 deliveries by 5,000 or more. I’m personally estimating Q3 deliveries between 315,000 and 330,000. But given the company’s sprawling global supply chain, it’s getting increasingly difficult to guess where deliveries will fall. Whatever the case, we can expect strong sequential and year-over-year growth with near certainty.

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