Tesla has had its share of ups and downs over the years with exploding cars, autopilot mishaps, and CEO Elon Musk saying and doing foolish things on the internet. But this week was a big “up” for the electric car maker. Tesla’s latest quarterly report includes a record number of vehicle deliveries at 95,200.
Tesla’s stock rose as expected following the news, gaining 7 percent after falling 35 percent since early 2019 when it reported slower than expected sales. Tesla has benefited from a full quarter selling the Model 3, its most affordable vehicle, in Europe and China. The Model 3 previously launched for US buyers in 2018, after taking reservations for years.
The Model 3 makes up the vast majority of Tesla’s record-breaking sales at 77,550. That’s a 50 percent increase over the first quarter of the year. Sales of the more profitable Model S and Model X increased as well from 12,100 to 17,650. However, that number is lower than the 27,550 S and X vehicles delivered in the last quarter of 2018. That suggests the Model 3 is pulling some buyers away from the more profitable cars. Still, the increased sales are making up for it.
Tesla also says that its production capacity has increased by 13 percent in the second quarter of 2019. Only 7,400 cars were still listed as in transit to buyers, down from 10,600 at the end of the first quarter.
The increased sales may be harder to sustain going forward. Tesla has cut prices several times in pursuit of its goal of selling 400,000 cars this year. The automaker is also facing the end of government tax breaks for selling electric vehicles. The $7,500 tax credit fell to $3,750 early this year, and now it’s down to $1,875. It will go away completely at the end of this year. The company is also still operating at a loss.
One bright spot on the horizon may be Tesla’s upcoming launch of the Model Y. This vehicle splits the difference between the Model 3 and the high-end Model X. It’s a smaller crossover/hatchback offering more space than a Model 3 and a lower price than the Model X. The Model Y will launch in late 2020 for US customers.