Tesla revealed that it was able to deliver 25,000 electric vehicles in the first quarter, which is a record number and a 69 percent increase compared with the delivery figures of the first quarter of last year.
The record number of deliveries for the first quarter starts the year off right for Tesla. The question, however, is if the company will be able to maintain its momentum as production is expected to ramp up in preparation for the mass-market Model 3.
Tesla Sets Record Deliveries
Tesla delivered 25,418 electric vehicles in the first quarter, slightly above the previous quarterly record of 25,185 delivered vehicles in the third quarter of 2016. The company noted that there was an additional about 4,650 electric vehicles produced, but were not counted as deliveries for the first quarter as they were still in transit to customers. These deliveries will then be counted for the second quarter.
The record-setting figure also shows Tesla bouncing back from a fourth quarter when it missed its projection of 25,000 deliveries, with only 22,200 electric vehicles delivered that caused the company to fail its full-year 2016 target of 80,000 delivered vehicles.
The over 25,000 electric vehicles that Tesla delivered for the first quarter is composed of about 13,450 units of the Model S electric sedan and about 11,550 units of the Model X electric SUV. The record figure also keeps Tesla on track of meeting its delivery target of 47,000 to 50,000 electric vehicles for the first half of the year.
Tesla Beats Analyst Expectations
The average forecast from three analysts on the deliveries that Tesla will make for the first quarter was only at 24,200 units. The company was able to beat these expectations, boosting its confidence as well as that of shareholders that it will be able to reach its target for the first half.
Since its lowest point in Dec. 2, the stocks of Tesla have increased by 55 percent. Last week, the company's share price increased by almost 6 percent upon the news that Chinese conglomerate Tencent Holdings purchased a 5 percent stake in Tesla for $1.78 billion.
With Tencent now a significant investor in Tesla, the electric car company now has a clear path for the further expansion of its business in China. While the United States is still the biggest market for the company with sales of $4.2 billion last year, the $1.1 billion in sales from China is triple the $318 million from 2015, representing massive growth and a big opportunity for Tesla.
Tesla Ramps Up Production For Model 3
Tesla previously revealed that it will begin limited production of the Model 3 electric vehicle by July, with volume production to launch in the fourth quarter. About 5,000 vehicles weekly is expected to be produced in the quarter, with production to further increase to 10,000 vehicles weekly by 2018.
Weekly production of 10,000 vehicles is still a long way to go for Tesla, compared to 25,000 vehicles delivered in the first quarter. However, the record figure is a good sign for Tesla as it prepares to begin producing the mass-market Model 3.
"It's all about the Model 3 right now, but this is very good news," said Robert W. Baird & Co. analyst Ben Kallo.
"25,000 units is the best we could have thought, and people are looking at Model 3 for growth," he added.
