Tesla Delivery Growth Acceleration Continues

Tesla Delivery Growth Acceleration Continues

Tesla’s June deliveries are further evidence of a true growth story. Excluding the impact of the easy comps, the company appears to be in the slope of its growth S-curve. We believe the reason this is happening is a combination of consumer willingness to purchase EVs, along with Tesla’s winning formula of vehicle performance and value.¬†For the June quarter, Tesla delivered 201k vehicles, in line with consensus estimates and a record for the company. Most importantly, this equates to 122% y/y growth, up from 109% in March and 61% in December. In June, the overall auto industry is going to grow around 55%.

The S-curve

A signature signal of a growth company is an acceleration in growth. This is rare, given this step up in velocity is increasingly difficult off a growing base. Of course, a company can still be in growth mode without this acceleration; however, when this dynamic appears, it’s noteworthy because it’s rare.

The chart below illustrates Tesla’s accelerating delivery growth over the past seven quarters, with 23% delivery growth in Dec-19 climbing to 122% in the most recent quarter. Due to pandemic shutdowns, results in the Jun-20 and Jun-21 quarters should be taken in context.

In plain English, something bigger is going on, which we believe is the combination of consumer readiness for EVs, along with Tesla’s value proposition.

Company on track to meet or exceed Street delivery estimates for 2021

Through the first 6 months of the year, Tesla has delivered 386k vehicles. The Street is looking for 853k deliveries in full year 2021, meaning the company is 45% of the way there. Typically, the company delivers 55%-59% of vehicles in the back half of the year, which implies the company’s on pace to deliver between 850k and 900k vehicles this year.

Putting June deliveries into context

The 122% growth is impressive given there were more headwinds than tailwinds in the quarter. The one tailwind was that the Fremont factory was shut down for most of the June 2020 quarter due to the pandemic, giving the company easy comps. In contrast, Tesla deliveries faced two headwinds:

  • All automakers continue to face chip shortages dragging on production and inventory.
  • For the second consecutive quarter, Model S and X deliveries were about 2k due to the ongoing model refresh. Normally S and X deliveries are around 15k per quarter. We expect S and X deliveries to rebound in the September quarter.

Some context relative to other automakers

As a point of comparison to Tesla’s 122% delivery growth, GM reported delivery growth of 40% in June, and Toyota at 70%. This is consistent with the ~50%¬†delivery growth gap Tesla has maintained over the broader auto industry over the past year. It’s important to note that this comparison has a flaw, in that it compares Tesla’s global numbers to other automakers’ US deliveries. While this inconsistency muddies the comparison, we think the trend is still representative.

Disclaimer

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