Tesla’s deliveries have crushed expectations. Here’s what happens next.

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Another quarter, another record.

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growing rapidly, despite a global automotive semiconductor shortage disrupting production.

The electric vehicle pioneer recorded a record quarter on Saturday with deliveries up more than 70% over one year. Calling the stock market reaction Monday is a game of chance, but one day’s stock performance doesn’t really matter. Heavy deliveries, however, usually mean good news for Tesla Bulls on the road.

Tesla (ticker: TSLA) delivered 241,300 vehicles in the third quarter of 2021, up from around 201,000 delivered in the second quarter of the year and around 140,000 delivered in the third quarter of 2020. Wall Street was looking for around 225,000 to 230,000 deliveries of vehicles.

Tesla produced nearly 238,000 vehicles in the third quarter. Production and deliveries to customers are generally close to each other.

Since the start of the year, Tesla has delivered more than 627,000 vehicles, up almost 100% from 2020.

The results should be good enough to keep the stock stable on Monday. The biggest reaction to heavy shipments usually comes in the weeks after the numbers are released.

Tesla stock outperformed the

S&P 500
six times out of the last eight between the declaration of deliveries and the declaration of quarterly profits. Quarterly earnings arrive about three or four weeks after the delivery results.

Quarterly deliveries set new records in seven of the last eight quarters. This is not surprising for a growth stock like Tesla. But record deliveries don’t always mean Tesla’s inventory spikes immediately after a quarterly release. Expectations, of course, matter more than the actual number. And expectations for third quarter deliveries have increased.

Expectations for third quarter deliveries have risen from around 220,000 to 225,000 to 225,000 to 230,000 in the past two weeks. In fact, rising expectations are one of the main reasons Tesla stock has outperformed recently.

Tesla stock has looked remarkably stable in the face of recent market volatility. Stocks rose 0.1% over the past week. The

Nasdaq Composite
fell 3.2% over the same period. The S&P 500 is at 2.2%. Additionally, Tesla stock rose around 5% in September. The Nasdaq fell 5%. Stock in Chinese electric vehicle manufacturer

NIO

(NIO) fell 9%.

Investors are also used to the good news. Tesla stock rose 4.4% after announcing first quarter 2021 deliveries. Shares only rose 0.1% after second quarter deliveries. The second quarter figure, another record, was the first time Tesla has cracked 200,000 vehicle deliveries.

Overall, Tesla appears to have passed the third quarter delivery test. And more cars delivered should mean analysts are raising earnings estimates for third-quarter earnings. Perhaps this is the reason Tesla stock is strong after earnings.

But good news can also be good news.

Ahead of the results, Tesla is holding its annual meeting on October 7. At this event, investors will want to hear about production increases at the company’s two new facilities in Texas and Germany.

Write to Al Root at [email protected]