News: Shock & Awe from Tesla

EV Maker Reports Record Deliveries for 2019

Tesla once again defied naysayers by hitting its projected sales numbers in a year where the company grew by 50 percent compared to 2018. The company hit several milestones, some good, some bad. It was producing cars in its Shanghai, China, Gigafactory 3 less than a year after construction started on the facility. The company’s total production numbers for 2019 established a new record for the company, but its sales success also meant that U.S. federal tax incentives ran out at the end of the year, effectively raising the price of Tesla’s models.

Deliveries for the fourth quarter were reported as 112,000, while the total for the year was an impressive 367,200, led by the Model 3 (82 percent). Model S and X sales dropped precipitously this year (by a third compared to 2018). Tesla said it expects a significant impact from cars produced in the new China plant in the coming year, the first 15 of which were delivered just before the end of the year. Tesla’s target is to produce 250,000 cars per year there. It is the first auto assembly plant in China owned and operated by a foreign car company. Tesla secured a $1.4 billion five-year loan for the plant two weeks ago.  

What we’re waiting to hear is how 2019’s surprising numbers play out on Tesla’s balance sheet. While Tesla has been trying to increase profit margins on the more affordable Model 3 (compared to the Model S and Model X that tend to retail close to $100,000), but even with the volume those lower margins have challenged the company’s ability to turn an overall profit on its operations. It squeezed out a surprise operating profit last quarter, surprising analysts and boosting the stock, which currently gives the company a valuation greater and most more established car companies.  

This year is a big one for Tesla as it plans to launch its Model Y SUV and may start production of its Roaster 2.0 and Semi truck. Tesla CEO Elon Musk also announced that the company would build Gigafactory 4 near Berlin, Germany, to begin local production for the European market. We’ll be covering it all here at Clean Fleet Report.