Tesla surges on record quarter of deliveries, boosted by strong Model 3 car sales in China, Europe

Tesla shares surged in European trading as a record quarter of deliveries alleviated the worst fears about demand for the Elon Musk-led company’s electric vehicles.

The Model 3 maker handed over 95,200 cars to customers in the three months ended June, exceeding the previous best mark set in the last quarter of 2018. Tesla’s delivery count exceeded all but one analyst’s estimate in a Bloomberg News survey.

Tesla shares jumped as much as 7.1 per cent during US pre-market hours. The stock had fallen 33 per cent for the year through the end of regular trading in New York on Tuesday, in part due to demand concerns that the company’s billionaire chief executive has repeatedly disputed.

While the results go a long way toward contradicting Tesla’s doubters, it remains to be seen whether this level of demand is sustainable – or profitable. The US$3,750 US federal tax credit buyers were eligible for was cut by half beginning on July 1, and deliveries tailed off the last time the incentive shrank. Musk also has said the company will post a loss for the quarter, then report positive earnings in the second half.

Tesla also left out of its statement any mention of its full-year forecast for 360,000 to 400,000 deliveries, a projection it reaffirmed in its release a quarter ago. Tesla representatives did not respond when asked whether the company is sticking with its guidance. It will have to average more than 100,000 units per quarter in the second half to reach the low end of the range.

“The stock and future of Tesla all reside on the sustainable demand going forward and elusive profitability,” Dan Ives, an analyst at Wedbush Securities, wrote in a report.