Can Tesla hit 2020 delivery goal? Investors watch for Musk steer

In this news, we discuss the Can Tesla hit 2020 delivery goal? Investors watch for Musk steer.

(Reuters) – When Tesla Inc TSLA.O releases third quarter results after Wednesday’s bell, it will be the next three months, and whether chief executive Elon Musk can meet the company’s ambitious year-end goal , analysts will be interested in.

The electric automaker has stuck to its 2020 delivery forecast of half a million vehicles despite a global pandemic and economic upheaval that has plunged most of its internal combustion rivals into the red.

That means Tesla is due to deliver more than 181,600 vehicles in the last three months of the year – a 30% increase from record deliveries of 139,300 vehicles in the third quarter.

While several analysts believe this goal is achievable, others predict a deterioration in the macroeconomic environment.

“I am … cautious of demand given the recessionary environment and the accelerated pace of coronavirus infections, making it difficult for the company to meet its car sales target of 500,000 for the year ”Said Haris Anwar, senior analyst at investment.com.

Analysts on average expect Tesla to report third-quarter net profit of $ 593 million on revenue of $ 8.4 billion, according to data from Refinitiv.

Several analysts, including Frank Schwope of Nord / LB, believe the positive numbers are due to regulatory credits – the payments Tesla receives from other automakers to offset their emissions.

Tesla chief financial officer Zachary Kirkhorn said in July that the automaker expected credit income in 2020 to double from 2019 levels, but said cash flow would eventually decline.

With a slow recovery in the United States and a Europe struggling with a second episode of the virus outbreak, Tesla analysts had placed their hopes for growth on China, which has started to recover as consumers shed the effects of the pandemic.

Although Tesla does not break out regional sales, data from the Chinese auto industry association CPCA showed sales of Tesla Model 3 sedans remained roughly flat from July to September. Overall, Tesla sold a total of around 34,100 Shanghai-made Model 3s in the third quarter.

Third-quarter registration data in California, Tesla’s largest U.S. market, showed on Tuesday that Tesla vehicle registrations fell 13% from a year ago.

Goldman Sachs analysts said in a note that they hoped Tesla would provide investors with more details on Wednesday about the Chinese market and which countries have offset lackluster demand in the world’s second-largest economy.

Tesla plans to increase production over the next few years by expanding production at its Shanghai plant to 250,000 vehicles per year, including its Model Y crossover.

It is also building new vehicle and battery factories near Berlin, Germany, and Austin, Texas.

Reporting by Tina Bellon in New York and Akanksha Rana in Bengaluru; Editing by Joe White and Sonya Hepinstall

Original © Thomson Reuters

Originally posted 2020-10-21 04:06:10.

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