During the Q3 2023 Earnings Call, Tesla CEO Elon Musk said that the automaker is still seeking to achieve its original vehicle delivery target of 1.8 million vehicles this year. Taking the vehicle delivery records from the past three quarters, this guidance looks a bit ambitious.
Tesla (TSLA) will need to score its highest-ever quarter to deliver 1.8 million vehicles this year. The automaker must deliver at least 475,926 cars in Q3 2023 to reach the 1,800,000 units mark.
Tesla delivered a total of 1,313,851 vehicles in 2022 which was a record year for the company. Tesla has surpassed this number in the first three quarters of this year by delivering 1,324,074 vehicles from Q1 to Q3 2023. The Austin, Texas-based automaker achieved this target besides a setback in vehicle deliveries in Q3.
|Total till Q3||1,350,996||1,324,074|
(required units to reach 1.8M cars)
The numbers above suggest that Tesla has to produce just under 450K cars to reach 1.8 million units of production this year. But the real challenge is delivering around ~476K vehicles — which is not impossible but tough for the automaker.
Currently, Q2 2023 holds the record for being the best quarter for Tesla in terms of vehicle deliveries.
However, we are observing many shipments of the new Tesla Model 3 Highland reaching the ports of Europe. Generally, vehicle sales spike during the last quarter of the year in Europe and North America, so Tesla might achieve its goal rather easily than expected.
The popularity of the Model 3 Highland and the start of the new Model Y deliveries in China will be the main contributors to Q4. Although Tesla has started Cybertruck production and deliveries will begin on 30th November, it is not expected to add a sizable chunk to the overall delivery numbers. According to Elon Musk, scaling Cybertruck production and making it profitable will take at least 12-18 months.
Tesla (TSLA) Q3 2023 Performance
During the TSLA Q3 2023 Earnings Call, CEO Elon Musk stated that the company’s energy storage business is becoming its highest-margin segment. Tesla delivered 4 gigawatt-hours (GWh) of energy storage in Q3. Tesla’s energy and services business contributed around half a billion dollars to the Q3 profit alone.
As we can see in the Financial Summary table above, despite the low number of vehicle deliveries in Q3, total revenue still showed growth compared to Q3 2022 year-over-year (YoY). However, Tesla’s gross profit slid down YoY, this was mainly due to the massive decline of 7.2% in gross margin.
Total GAAP gross margin has been on a steady decline this year because of the constant price drops of Tesla cars in 2023.
Update: Despite the stock market crash speculations all around, TSLA stock gained +$2.77 (1.31%) this morning to reach $214.85 (Monday 23 Oct, 11:19 am GMT-4). The rest of the trading day is still ahead of us.