Should investors worry about Tesla's Q1 deliveries miss?

There's still good reason to believe Tesla good easily meet or exceed its full-year guidance for vehicle deliveries.

| More on:
red tesla on the road

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Electric-car maker Tesla (NASDAQ: TSLA) reported first-quarter deliveries on Saturday. While the record deliveries were far higher than they were a year ago, they were short of analysts' average estimate for the quarter.

On one hand, Tesla's first-quarter deliveries are an impressive achievement given the global supply chain challenges. On the other hand, however, the fact that they were worse than expectations provide more confirmation to investors that the auto industry is struggling to recover from chip shortages and other parts and logistical issues that have been plaguing it. 

Tesla's first-quarter deliveries: The raw numbers

Tesla delivered approximately 310,000 vehicles in Q1. This record quarterly figure is up from about 309,000 in the fourth quarter of 2021 but represents a staggering year-over-year growth rate of 68%. The figure also notably puts Tesla's trailing-12-month deliveries at a figure above one million (about 1,061,000) -- for the first time. This is up from trailing-12-month deliveries of approximately 596,000 just one year ago.

The deliveries in the quarter consisted of 295,324 Model 3 and Y vehicles combined and 14,724 total Model S and X vehicles. Model 3 and Y deliveries were down slightly sequentially while Model S and X deliveries were up 25% over the same time frame. The sharp sequential increase in Model S and X deliveries reflects Tesla's ongoing ramp-up of production of these vehicles following an overhaul to their design in early 2021 that required updates to the electric-car maker's production line. 

Analysts, on average, were expecting Tesla to deliver about 317,000 vehicles during the period. The underperformance likely took some investors by surprise because the sequential growth was the slowest Tesla has seen in years.

There's hope for a strong second half

While the quarter's deliveries may have missed analysts' estimates, there's still good reason to expect sequential growth to reaccelerate later this year, particularly in the back half of 2022. The company said in its fourth-quarter update that it expected production levels to increase at its existing factories and that it would bring production online at new factories in 2022. Indeed, production has already started at the company's factory in Germany. And Tesla could be just months away from the start of production at its new factory in Texas.

But things could get worse before they get better. Tesla's factory in China is currently on a production pause because of COVID-19 restrictions. Furthermore, it takes time to ramp up production at new factories. So any impact from Tesla's factory in Berlin in Q2 could be very small. 

Despite supply shortages and a production pause in China, Tesla's full-year guidance for 50% growth this year may be conservative enough for the company to still easily surpass this range, especially if some supply constraints are alleviated in the second half of the year -- just as production potentially ramps up to meaningful levels at new factories. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Daniel Sparks has no position in any of the stocks mentioned. His clients may own shares of the companies mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on International Stock News

A man looking at his laptop and thinking.
International Stock News

Why Alphabet stock was sliding today

Let's take a look.

Read more »

A man looking at his laptop and thinking.
International Stock News

Nvidia's stock was down despite its amazing earnings. Here's what history says is coming next

Although it might seem to defy logic, it's not an uncommon phenomenon.

Read more »

A woman holds a soldering tool as she sits in front of a computer screen while working on the manufacturing of technology equipment in a laboratory environment.
International Stock News

Nvidia share price slips despite 94% revenue growth

Q3 earnings beat expectations, but what about guidance?

Read more »

high, climbing, record high
International Stock News

Could the S&P 500 Index hit 6,500 by the end of 2025?

Could the index climb higher?

Read more »

a small child holds his chin with his head on the side in a serious thinking pose against a background of graphic question marks and a yellow lightbulb.
International Stock News

Is it too late to buy Nvidia shares?

Is Nvidia stock a buy ahead of its third-quarter earnings report tomorrow?

Read more »

a group of people stand examining a large glowing cystral ball held in the hands of one of the group members while the others regard it with various expressions of wonder, curiousity and scepticism.
International Stock News

Here's what to expect from Nvidia on November 20

Can Nvidia score another win?

Read more »

Two people lazing in deck chairs on a beautiful sandy beach through their hands up in the air.
International Stock News

2 no-brainer Warren Buffett stocks to buy right now

While replicating Buffett's success isn't possible, there are a handful of his investments that are no-brainer buys.

Read more »

A man with a beard and wearing dark sunglasses and a beanie head covering raises a fist in happy celebration as he sits at is computer in a home environment.
International Stock News

3 reasons to buy Nvidia stock before November 20

This week marks a big moment for tech investors as perhaps the most anticipated earnings of the year will be…

Read more »