Tesla Posts Record Second-Quarter Deliveries as European Sales Rebound

Tesla recorded a new delivery high of 480,126 vehicles in the second quarter, beating estimates from Wall Street analysts and indicating a resurgence in the company's automotive business following two years of stagnant sales.

Deliveries between April and June represent a 25% increase year-on-year and easily beat the average analyst expectation of 402,776 vehicles according to Visible Alpha. During the quarter, Tesla produced 451,758 vehicles, meaning the number of deliveries exceeded production by more than 28,000 units. This helped trim down inventory accumulated over the last year.

Tesla’s strongest gains were made in Europe.

Following two difficult years in some European markets where the company saw a significant slow down, sales bounced back with supportive government electric vehicle policies, higher gas prices and corporate demand to electrify their fleets contributing factors. Many were also less swayed by the brand back-lash caused by CEO Elon Musk’s public and political stance last year.

The US market however still trailed.

Even as sales appeared to have found some steadiness in the US after falling off the back of a removal of the federal government's $7,500 EV tax credit, sales were still somewhat lacking although faring better than other US automakers experiencing a slowdown in the EV market.

Tesla’s strong showing was further supported by sales in China.

Despite considerable competition from domestic automakers, sales of Teslas manufactured in the US were up in the second quarter largely thanks to demand from the new model Y.

Despite beating delivery expectations, investors have been closely watching the company's long term goals rather than quarterly sales figures.

Next year, Tesla plans to spend more than $25bn – nearly three times last year’s investment – on building artificial intelligence (AI) data centres and expand its factories in time for building robots and cars such as the Cybercab, or robotaxi. The company has, increasingly been painting a narrative about itself not as just a car manufacturer but as an AI and robotics company and is committed to transforming into the same.

Tesla also is expanding its ambitions in the autonomous driving market. The company recently began deploying its full self driving software in select parts of Europe and its limited robotaxi service within the US. Production of Tesla’s specially built driverless Cybercab is also scheduled to begin later this year.

Despite these impressive delivery numbers, Tesla shares fell slightly in early trading with a majority of analysts having already built this expected improvement into the stock prices which experienced a rally on the stock over the past few weeks. Many investors said the information that will move stock prices had already been factored into shares prior to Tesla's delivery release.

Regardless, this marks a positive turning point for Tesla. Following two years of decelerating growth in vehicle sales as well as increased competition and brand issues. However, given this resurgence in deliveries of cars this offers additional capital to support its heavy investment in AI, and the company continues its quest to establish itself not as a vehicle but an AI technology powerhouse.

Vehicle sales currently bring in the lion’s share of revenues for Tesla, but investor focus is slowly moving toward the company’s nascent AI businesses. This new sales report highlights how Tesla’s vehicle business continues to prove resilient while its futuristic endeavors develop.