Tesla delivers record number of EVs in Q4 but falls just short of full-year target

The company has ramped up output of its mass market models to meet rising global demand for electric vehicles

FILE PHOTO: A logo of car manufacturer Tesla is seen at a branch office, amid the coronavirus disease (COVID-19) outbreak, in Bern, Switzerland December 10, 2020. Picture taken December 10, 2020. REUTERS/Arnd Wiegmann/File Photo
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Tesla delivered a record number of cars worldwide in the fourth quarter of 2020, but fell just shy of a goal for 500,000 units for the full year.

The electric car maker delivered 180,570 vehicles in the last three months of the year, eclipsing its prior all-time high of 139,300 in the third quarter of 2020 while increasing 36 per cent from 367,500 deliveries in 2019.

The company has been ramping up output of its mass market models to meet rising global demand for battery-powered cars.

The Palo Alto, California-based company said in a statement on Saturday its delivery count should be viewed as slightly conservative and final numbers could vary by up to 0.5 per cent or more.

The quarterly delivery figure is widely seen as a barometer of demand for both Tesla’s vehicles and consumer interest in electric vehicles worldwide. The result capped a remarkable year for chief executive Elon Musk and his company, which joined the Standard & Poor’s 500 Index on December 21 after posting five consecutive quarters of profit.

The company’s shares rallied 743 per cent last year.

Tesla had predicted in January 2020 – before the onset of the coronavirus pandemic – it would “comfortably exceed” sales of half a million cars. The company said in October that it still expected to meet that target despite a temporary shutdown of its factories in the spring, and Mr Musk signalled it was well within reach in an internal email sent to employees in December.

Analysts also predicted Tesla would meet its sales goal for the year, which further buoyed the company’s shares in the waning days of 2020. The surge, coming despite multiple share offerings, has vaulted Tesla’s valuation to an auto industry-leading $669 billion.

The company undershot the 181,000-vehicle threshold it needed to clear in the most recent quarter, a 30 per cent jump over the July-September period. The push largely depended on increased output from its Chinese plant and higher output in the US of the newest car in its line-up: the Model Y.

On Saturday, Tesla said Model Y production in Shanghai has begun, with deliveries expected to begin soon.

“Tesla’s miss of a 500,000 delivery goal for 2020 indicates the car maker is still struggling to scale up, as the eighth year of mass-market pursuit still leaves the company about the size of Isuzu globally, even as it eclipses the combined market cap of 10 car makers that deliver more than 50 million units annually," Kevin Tynan, senior autos analyst at Bloomberg Intelligence, said.

"Tesla faces compressing margins as the focus shifts to China and sales by competitors mute the profit contribution of regulatory credits initially, then threaten market share.”

While Tesla is the clear global market leader, its vehicle deliveries are tiny compared to the millions of petrol-powered cars and trucks sold by established car makers such as General Motors and Volkswagen. Those two automotive companies and others are preparing to flood the nascent EV market with dozens of battery-powered models over the next five years.

To capitalise on its head start, Tesla is building two new vehicle assembly operations – one in Berlin that could eventually assemble as many as 500,000 cars annually, and another in Austin, Texas, that will make the brand’s first pick-up. Both are expected to start production later this year, joining its existing vehicle-assembly facilities in Fremont, California, and Shanghai.

Once known for niche luxury models such as its S sedan and X sport utility vehicle, Tesla has broadened its appeal with the 3 and Y models priced to start below $50,000. Mr Musk said in September that he plans to start sales of a cheaper $25,000 Tesla by 2023.

As usual, Tesla delivered many cars during the quarter’s final days. Mr Musk added an incentive to buyers in the final three days of the year, saying in a tweet that they would get three months of an optional driver-assistance tool Tesla calls Full Self-Driving.

Danielle Watson, a 31-year-old pharmacist, tweeted on December 28 that she had just taken delivery of a Model Y. In a private message, the Greenville, South Carolina, resident said she took delivery in Charlotte, North Carolina – a sign the lure of Tesla’s brand power in the US is growing well beyond its home state of California.