Tesla’s (TSLA) Q3 Delivery Miss Sparks Demand Concerns Amid A Tougher Business Climate

It appears that Tesla’s (TSLA) last ditch effort to close out Q3 with a surge of deliveries came up short as the electric vehicle (EV) maker missed analysts’ estimates by a fairly wide margin. Recall that last week, Electrek reported that Elon Musk asked his employees to gear up for a strong push of deliveries over the weekend, lifting expectations that TSLA would post an impressive record setting number that exceeded forecasts. While deliveries of 343,000 vehicles did set a new quarterly record for TSLA, and increased by 42% yr/yr, logistical and transportation challenges prevented the total from meeting the bullish projections.

In its Delivery and Production Report, TSLA stated that it’s becoming more difficult to secure vehicle transportation at reasonable costs as its production volumes grow. Indeed, production has soared, jumping by 53% yr/yr in Q3 to 365,000 vehicles, driven by the recent launches of its Berlin and Austin, Texas factories in March and April, respectively. Additionally, the company revamped its Shanghai plant this past summer, boosting its capacity by 30% to 22,000 vehicles per week.

TSLA tried to sooth these concerns, stating that there was an increase in cars in transit at quarter end, and that these cars have been ordered. Once these cars are delivered, the difference between production and deliveries should shrink. However, based on the stock action, it’s evident that some uneasiness remains, perhaps due to the following reasons.

The main takeaway is that cracks may be forming in a demand picture that was viewed as nearly bullet proof just a couple weeks earlier. We don’t want to overreact to the report because TSLA still experienced a robust increase in deliveries, and its explanation that transportation challenges are increasing as production ramps up has merit. Macroeconomic and competitive risks are rising, though, and TSLA’s shortfall on deliveries is putting those risks front and center today.