Tesla’s shares are up but investors are looking ahead to the company’s quarterly results.
Tesla’s shares were up on Wednesday after the company revealed that it delivered 92,500 cars during the last quarter. This beat the company’s record of 90,700 deliveries, which it reached in the final quarter of 2018.
Tesla’s shares were up 7% in premarket trading and investors are cautiously optimistic. In a note to investors, USB wrote that the spike in deliveries doesn’t change the company’s “cautious view on Q2 earnings.”
3 Positive Indicators for Tesla
Tesla struggled during the first quarter of 2019 when the company’s deliveries fell to 63,000 cars and the company lost $702 million. But there are still several factors that are working in Tesla’s favor, as outlined below.
Strong sales of the Model 3
Out of all of Tesla’s second-quarter deliveries, 77,550 of these were a Model 3, which is Tesla’s best-selling car. Tesla customers don’t pay full price until they receive the vehicle, so the boost in deliveries should lead to increased revenue.
Tesla improves its overseas shipping and deliveries
The company largely attributed its drop in deliveries during the first quarter to logistical issues. The company had recently begun shipping the Model 3 overseas. During the second quarter, Tesla found a way to streamline its overseas shipping and deliveries. This could save the company money and increase its sales going forward.
There’s still strong demand for Tesla vehicles
During the second quarter, Tesla received more new orders than it was able to deliver. This is good news since it indicates that there’s strong consumer demand for the company’s vehicles.
What’s Next for Tesla?
The first quarter of 2019 was a difficult one for Tesla but this increase in deliveries seems promising. However, even the most optimistic analysts are waiting to see Tesla’s second-quarter earnings report on Aug. 7.
The tax cut for the Model 3 was reduced by 50% on Monday and will go away completely by the end of 2019. So investors will be looking for signs that there’s a demand for electric cars.
In a press release, Tesla said it expects that the increase in production and deliveries should continue into the third quarter. Earlier this year, the company said that it expects to become profitable in the second half of 2019.
