Tesla Kicks Off 2021 With Rising Deliveries -- 2nd Update

By Rebecca Elliott 

Tesla Inc. delivered a record number of vehicles in the first quarter in the face of growing electric-car competition and supply-chain challenges that have hit the global auto industry.

The Silicon Valley auto maker's roughly 184,800 global deliveries in the first three months of the year eclipsed the high set in the previous quarter and more than doubled from the same period a year earlier, when Tesla idled its lone U.S. car plant in the face of the coronavirus pandemic. Deliveries, which cruised past analysts' expectations, were up about 2% from the year-end quarter.

The electric-car maker handed over nearly 500,000 vehicles to customers globally last year -- its first full year in the black -- and expects deliveries to advance more than 50% in 2021, though it hasn't set a specific target.

Stiffer competition from the likes of Ford Motor Co. and Volkswagen AG, whose all-electric vehicles are making inroads in key markets, is increasing pressure on Tesla to accelerate production growth and bring new models to market.

Analysts surveyed by FactSet on average expected Tesla to hand over about 168,000 vehicles to customers in the first three months of the year, which typically are the company's weakest for deliveries. That forecast fell in recent weeks as auto makers contended with a global shortage of semiconductors that forced many companies to scale back output. Ford, for example, said Wednesday that it was scheduling more downtime for some of its plants because of tight chip supplies.

Tesla in February temporarily shut down its Fremont, Calif., factory because of parts shortages. The company also had warned of lower first-quarter output of the Model S luxury sedan and Model X sport-utility vehicle as it introduces updated versions.

The car maker's delivery figures come as several auto makers reported rising U.S. vehicle sales in the first quarter, helped by stronger consumer demand. Rival electric-vehicle makers in China, such as NIO Inc., also have seen strong demand this year.

Deliveries of Tesla Model S and Model X vehicles in the first quarter totaled around 2,020. Tesla handed over about 182,780 Model 3 sedans and Model Y compact sport-utility vehicles combined. Tesla doesn't disclose deliveries by region.

Tesla also said it produced 180,338 vehicles in the quarter, all of them Model 3s or Model Ys.

The company said the new Model S and Model X have been "exceptionally well received," adding that it is in the early stages of boosting production after installing and testing new equipment.

The strong delivery numbers are poised to underpin what Wall Streets expects to be robust first-quarter earnings for Tesla, due in a few weeks. Sales are expected to top $10 billion, helping generate around $470 million in profit, according to a FactSet survey of analysts before the latest delivery figures were posted.

Tesla is aiming to open two new vehicle factories this year, one near Austin, Texas, and the other outside of Berlin. That plant will be the company's first in Europe, the world's largest electric-vehicle market as of last year, and is seen as key to improving Tesla's fortunes in the region.

Tesla registrations in Western Europe slipped roughly 11% last year compared with 2019, as auto makers such as Volkswagen and Renault SA gained traction in the all-electric vehicle market, according to Schmidt Automotive Research.

"Given Europe's continued global leadership in [electric vehicle] penetration trends, we believe the Berlin launch is especially crucial for Tesla," Credit Suisse analyst Dan Levy wrote in a note this week. He said the factory would help Tesla reduce costs and provide a steadier supply of vehicles to the region.

Tesla has said it hopes to begin delivering an electric pickup truck and a long-delayed semitrailer truck to customers this year. Chief Executive Elon Musk has said recently that a shortage of battery cells is making it difficult to increase output of the semitrailer.

Meanwhile, Tesla is facing increased regulatory scrutiny at home and abroad. The Chinese government is restricting the use of Tesla vehicles by military staff and others on national-security grounds, The Wall Street Journal reported last month. Earlier in the year, Chinese regulators summoned the company over consumer quality complaints.

Tesla struck a conciliatory tone at the time, saying that it "sincerely accepted the guidance of government departments" and had "deeply reflected on shortcomings."

In the U.S., the National Highway Traffic Safety Administration has launched probes into three recent crashes involving Tesla vehicles, at least one of which law enforcement tied to the company's advanced driver-assistance system known as Autopilot.

As of late March, the federal safety regulator had launched 27 investigations into Tesla crashes, all but four of which remained open. Some, but not all, of those probes are related to Autopilot.

Tesla also agreed earlier this year to recall some 135,000 vehicles over touch-screen failures.

Write to Rebecca Elliott at [e-mail]

(END) Dow Jones Newswires

April 02, 2021 11:02 ET (15:02 GMT)

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