Tesla hits delivery record as new Model 3 waits in wings

US electric car maker beats estimates on production and delivers more motors than expected as Elon Musk's company revs up for start of cheaper Model 3 output.

The Tesla Model 3 is due to begin production later this year with Tesla hoping it will help it to hit annual output of 500,000 vehicles per year. Courtesy Tesla

Tesla set a record for deliveries and production in the first quarter, beating analysts’ estimates as the chief executive Elon Musk prepares to begin building the Model 3 in July.

The maker of electric cars and energy-storage devices shipped just over 25,000 vehicles in the year’s first three months, Tesla said. That topped the average forecast of 24,200 from three analysts and should bolster confidence in Tesla’s target of delivering as many as 50,000 cars in this year’s first half.

“It’s all about the Model 3 right now, but this is very good news,” said Ben Kallo, an analyst at Robert W Bair. “25,000 units is the best we could have thought, and people are looking at Model 3 for growth.”

The report is the first in a pivotal year as Mr Musk differentiates Tesla’s line-up, adding the Model 3 as its first high-volume, lower-priced vehicle while making existing models even more exclusive. Investors have pushed up Tesla shares 30 per cent this year in anticipation of the Model 3 and on news that the Chinese internet major Tencent took a 5 per cent stake. Its US$45.4 billion market value is just $870 million less than Ford, which produces millions of vehicles a year.

The youngest publicly traded US motor maker builds cars in Fremont, California, and has yet to prove that it can manufacture in high volumes. Mr Musk has said Tesla aims to make 500,000 cars next year, an aggressive goal that hinges on battery-cell production at its so-called Gigafactory east of Reno, Nevada. Tesla has not given a full-year target for 2017.

Tesla said it delivered about 13,450 Model S saloons and 11,550 Model X 4x4s, while actual production in the first three months was 25,418.

The company is reworking its line-up and price structure ahead of July’s introduction of the Model 3, which is expected to begin at $35,000 before incentives and options. It is discontinuing a low-end Model S with its 60-kilowatt-hour battery pack on April 17, making the 75-kilowatt-hour Model S its cheapest car at $74,500 before tax credits or state rebates until the Model 3 arrives.

The delivery figure is a preliminary number that may change slightly in May when the company reports earnings for the period. Tesla releases global sales figures quarterly, instead of the monthly country-by-country results typically announced by other car makers. The delivery count only includes a car if it is transferred to the customer and all paperwork is correct.

* Bloomberg

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