Tesla Tops Expectations as Price Cuts Lift Deliveries to Record

Tesla Inc. delivered a record 466,140 cars worldwide in the second quarter, outpacing Wall Street estimates.

(Bloomberg) — Tesla Inc. delivered a record 466,140 cars worldwide in the second quarter, outpacing Wall Street estimates.

The results, posted Sunday, demonstrated that Chief Executive Officer Elon Musk’s vow to chase volume by cutting prices have had their intended effect. Analysts surveyed by Bloomberg had expected Tesla to ship 448,350 cars in the quarter.

“It’s a big beat,” said Ben Kallo of Robert W. Baird in a phone interview Sunday morning. “People were still bracing for another round of price cuts, and this big delivery number makes that less of a risk.”

The deliveries are the most ever in a quarter for Austin-based Tesla, and a 83% increase from a year ago. The company also managed to trim the gap between production and deliveries — a figure closely watched by analysts — to 13,560 units in the second quarter. In the first quarter, it produced nearly 18,000 more cars than it delivered to customers. 

“Everyone was worried about inventory build, and it looks like they’ve normalized,” said Kallo. “The delta between production and deliveries is shrinking, which is what Tesla said they would do.”

Tesla, which sells its cars directly to consumers, has a lot of levers to move vehicles. Besides cutting prices across the lineup earlier this year, the company introduced perks, such as three months of free fast-charging in the US for cars delivered before June 30, to entice buyers. Analysts have predicted price cuts will continue into next year.

Read More: Tesla Closes In on Another Deliveries Record After Price Cuts

Tesla doesn’t break out its quarterly delivery numbers by individual vehicle type or region. The Models 3 and Y accounted for 96% of sales. Tesla also makes the Model S and X. 

Tesla is easily still the largest EV maker in the US, but it’s facing fresh competition around the world. It’s most recent vehicle — the Model Y — debuted in 2020. 

In China — its No. 2 market — the company has fallen well behind BYD Co., which has a much fresher lineup and increasingly global ambitions. Tesla announced last week that it was cutting prices of its premium car models in China by more than 4.5%, following a decision to hand out cash subsidies to some buyers of its Model 3 vehicles last month.

Tesla will report 2Q earnings on July 19.

(Updates with analyst comment in third paragraph)

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