According to an email leaked to employees by CEO Elon Musk, Tesla (TSLA) has a shot in the ‘record quarter of vehicle deliveries’.
The end of the quarter is approaching and, as always, Tesla is in the midst of a delivery rush to improve its financial position in the quarter.
Unlike other auto tomers, Tesla owns its entire distribution system – meaning it doesn’t own every vehicle until it’s delivered to customers.
This has a huge impact on the auto manufacturer’s finances as it cannot recognize the revenue until the vehicles are delivered and it spends further money to build the vehicles.
As a result, Tesla is pushing hard to reduce its inventory every quarter and deliver as many vehicles as possible towards the end of the quarter.
In a new email to employees sent and received by ElectraCent today, CEO Elon Musk told employees that they can receive record deliveries from the “all hands” deck.
However, the CEO notes that they need to have the most vehicles every day to deliver:
“We have shots on record quarters for delivery, but we have to rally hard to achieve it. These days have the highest number of vehicles we will ever HD to deliver. “
There were previous quarters when Tesla delivered 30% full quarter vehicles during the last week of the quarter.
Musk added to the email:
“Please make vehicle delivery a top priority. It is also very important that we keep the factory production as low as possible in the remaining 10 days. This is important for the California market. ”
Tesla’s last record delivery during the fourth quarter of 2019 was 112,000 vehicles.
While “record delivery” sounds like a good thing, Tesla expects significantly more vehicles to be delivered in the fourth quarter.
Tesla’s Q3 delivery estimate from Wall Street analysts was 121,000 vehicles as of last week.
In the last quarter, Tesla delivered 90,000 vehicles, but its inventory was badly affected by the factory shutdown due to the epidemic.
The results were considered positive considering the circumstances.
Take the electric
Like Elon’s emails to employees, he left room for interpretation and didn’t go into details because he knew those emails would eventually be leaked.
But it sounds like if Tesla beats its previous delivery record, it will be easier.
It will deliver 110,000 to 115,000 vehicles.
It will be lower than expected based on most estimates coming in the quarter.
The reason behind this is still unclear to me, but expectations of Chinese delivery can be very high.
Tesla unveiled a production capacity of 200,000 vehicles at Gigafactory Shanghai in the last quarter.
It led us and many others to believe that China could contribute close to 50,000 vehicles in Q3, but it would have been very optimistic.
Anyway, in the current economic situation Tesla is still impressive to achieve a newly developed number of deliveries, even if the delivery falls short of the estimate of a few thousand vehicles.
What do you think? Let us know in the comments section below.
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