You may have noticed that Tesla dropped 8% last night. That is because they announced delivery numbers that disappointed the market. In the first quarter they produced 77100 vehicles but only delivered 63 000. This was down 31% from the previous quarter but still up 110% from the first quarter last year.
So what went wrong? I will let the company explain.
"Due to a massive increase in deliveries in Europe and China, which at times exceeded 5x that of prior peak delivery levels, and many challenges encountered for the first time, we had only delivered half of the entire quarter's numbers by March 21, ten days before end of quarter. This caused a large number of vehicle deliveries to shift to the second quarter. At the end of the first quarter, approximately 10,600 vehicles were in transit to customers globally".
This will also mean the company will have a poor financial quarter.
This may have surprised the market but is it really that surprising? Tesla have never delivered so many cars around the world before. There are always going to be teething pains for a company doing something no one else has ever done, mass production and delivery of electric vehicles. If you are looking at the long term picture, is a delivery bottleneck really the end of the world? I don't think so.
What the headlines failed to mention from the release was that the Model 3 was yet again the best selling mid-sized premium sedan in North America. Smashing the runner up by 60% more units.
As we always say, this stock is going to be volatile. If you want exposure, keep it small and manageable. But I still believe Tesla has the potential to be the next Apple.