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Tesla Q1 Deliveries Sequentially Down; Warns Of Q1 Profit

Tesla Inc. (TSLA) said Wednesday that it delivered about 63,000 vehicles in the first quarter, which was 110% more than the same quarter last year, but 31% less than last quarter. This included approximately 50,900 Model 3 and 12,100 Model S and X. The company expects first-quarter net income to be negatively impacted, due to the lower than expected delivery volumes and several pricing adjustments.

In the first quarter, the company produced about 77,100 total vehicles, consisting of 62,950 Model 3 and 14,150 Model S and X.

Due to a massive increase in deliveries in Europe and China, which at times exceeded 5x that of prior peak delivery levels, and many challenges encountered for the first time, the company had only delivered half of the entire quarter's numbers by March 21, ten days before end of quarter. This caused a large number of vehicle deliveries to shift to the second quarter. At the end of the first quarter, approximately 10,600 vehicles were in transit to customers globally.

Because of the lower than expected delivery volumes and several pricing adjustments, the company expects first-quarter net income to be negatively impacted. Even so, the company ended the quarter with sufficient cash on hand.

In North America, Model 3 was yet again the best-selling mid-sized premium sedan, selling 60% more units than the runner up. Inventory of Model 3 vehicles in North America remains exceptionally low, reaching about two weeks of supply at the end of the first-quarter, compared to the industry average of 2-3 months.

Despite pull forward of demand from the first-quarter of 2019 into the fourth-quarter 2018 due to the step down in the federal tax credit, US orders for Model 3 vehicles significantly outpaced what it was able to deliver in the first-quarter. The company reaffirmed its prior guidance of 360,000 to 400,000 vehicle deliveries in 2019.

Given that Tesla vehicle production currently occurs entirely from one factory in the San Francisco Bay Area, but must be delivered to customers all around the world, production could be significantly higher than deliveries, as it was this quarter, when production exceeded deliveries by 22%.

The company said,",,,,, We are doing everything we can to deliver cars globally as quickly as possible and look forward to continuing to scale deliveries throughout the year."

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