Unlike other automakers, Tesla has its entire distribution system, which means it owns every vehicle until it is delivered to customers.
This has a big effect on the finances of the automaker as it cannot recognize the revenue until the vehicles are delivered and it has spent the money up front to manufacture these vehicles.
This leads Tesla to go to great lengths each quarter to reduce its inventory and deliver as many vehicles as possible towards 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 could achieve record deliveries.
However, the CEO notes that this would require them to have the most vehicles per day to deliver that they have ever had:
“We have a chance to achieve a record quarter for deliveries, but we will have to come together hard to achieve it. This is the most vehicles per day that we could have delivered. “
There have been previous quarters where Tesla delivered 30% of the vehicles for the entire quarter in the last week of the quarter.
Musk added in the email:
“Please consider vehicle deliveries the top priority. It is also extremely important that we keep factory production as high as possible for the remaining 10 days. It’s vital for the California market. “
Tesla’s latest record deliveries were 112,000 vehicles delivered in the fourth quarter of 2019.
While “record deliveries” seem like a good thing, Tesla was expected to deliver significantly more vehicles in the fourth quarter.
According to Wall Street analysts, Tesla’s third-quarter delivery estimate was 121,000 vehicles last week.
Tesla delivered 90,000 vehicles last quarter, but its inventory was severely affected by a factory shutdown due to the pandemic.
The results were considered positive given the circumstances.
As usual with Elon’s emails to employees, he left room for interpretation and didn’t go into specifics because he knows those emails will eventually leak.
But it looks like if Tesla broke its previous delivery record, it would be narrow.
This would increase deliveries from 110,000 to 115,000 vehicles.
This would be lower than expected based on most estimates coming in the quarter.
The reason is still unclear to me, but the expectations for Chinese deliveries may have been too high.
Tesla revealed a production capacity of 200,000 vehicles at the Shanghai Gigafactory coming out of the last quarter.
This has led us and many people to say that China could supply almost 50,000 vehicles in the third quarter, but that might have been too optimistic.
Either way, Tesla to achieve a new record number of deliveries under current economic conditions is still impressive, even though deliveries are a few thousand vehicles lower than estimated.
What do you think? Let us know in the comment section below.
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