Deliveries beat expectations, but margins matter
The delivery figures provide a positive starting point for the results. Model 3 and Model Y deliveries reached 478,237, while other models accounted for 8,295. Production totalled 464,391 vehicles, meaning deliveries exceeded production during the quarter.
September also brought signs of improving demand in China. Sales of China-made Tesla vehicles rose 5% year on year, accelerating from 3.6% growth in August, according to data from the China Passenger Car Association. These figures include exports, so they do not represent domestic Chinese demand alone.
The challenge is converting sales into profitable growth. Tesla has faced intensifying competition from Chinese manufacturers, including BYD, as well as established carmakers expanding their electric vehicle ranges. Discounts and lower-priced models can support volumes but potentially weigh on average selling prices and automotive margins.
Investors will therefore be watching automotive gross margin, excluding regulatory credits, alongside average selling prices and management’s commentary on demand. A delivery beat is encouraging, but it will mean less to shareholders if it comes at the expense of profitability.