Tesla Shares Fall Thanks to Q3 Delivery Numbers

The company’s third-quarter production and delivery numbers didn’t meet Wall Street’s expectations.

This week, Tesla announced that it delivered 97,000 vehicles during the third quarter. These numbers broke down to 79,600 Model 3 cars and 17,400 Model S and X cars. 

The third-quarter deliveries are a new record for Tesla and beat the company’s second-quarter deliveries of 95,200 vehicles. But Wall Street was unimpressed by these results, mostly because they fell on the low side of what investors were expecting. 

Investors were expecting the company to deliver between 95,000 and 100,000 vehicles. The company’s shares fell more than 7% as a result.

The backstory on Tesla

Tesla’s production and delivery numbers are one of its most closely watched metrics. Mostly because this is a direct indicator of how strong the demand is for the company’s vehicles. It also gives investors a little insight into what they can expect from the company’s upcoming earnings report. 

In 2019, CEO Elon Musk has been building up a lot of excitement around the company’s production and delivery numbers. Just last week, a leaked email from Musk stated that the company “has a shot” at finally delivering 100,000 vehicles in a quarter.

This kind of talk is nothing new since Musk always sets the bar high for sales and deliveries. He previously forecast that the company will deliver between 360,000 and 400,000 vehicles in 2019. 

If Tesla met these numbers, it would be a 45% to 65% increase from 2018. If Tesla can deliver 105,000 vehicles during the fourth quarter, that figure is still within reach. 

Analysts worried about demand for Tesla

Tesla is one of those stocks that always seems to bring out the Wall Street bulls and bears. There is very little middle ground when it comes to analysts’ opinions of the company. 

Of the 26 analysts currently reviewing the stock, eight recommend holding it, seven recommend buying, and 11 analysts recommend selling. And on Wednesday, JMP Securities analyst Joseph Osha turned a bit bearish on the company. 

Osha downgraded Tesla, saying that for the first time, he’s concerned about the company. According to Osha, operational issues didn’t prevent the company from delivering more vehicles. So the deliveries miss could indicate waning customer demand. 

Ultimately, we’ll know more once the company delivers its third-quarter earnings on Oct. 24.