Tesla Reports Record Vehicle Deliveries in Q3 - Without the Help of the Model S, Model X

author: Eric Walz   

Tesla's Model S and Model X are produced at its factory in Fremont, CA.

As expected, electric automaker Tesla reported record electric vehicle sales over the weekend to close out the third quarter of 2021. Tesla's end of quarter push has always been "crunch time" for the company. Chief Executive Elon Musk has asked his employees to "go super hardcore" in thier push to deliver as many vehicles as possible before the end of Q3.

Tesla delivered 241,300 vehicles globally in Q3, up 73% for the same period last year. It beat analysts' estimates of 229,242 vehicles, according to Refinitiv data viewed by Reuters. It was Tesla's sixth consecutive quarterly gain.

Total production in the third quarter of 2021 also rose over 15% to 237,823 vehicles from the prior quarter. Overall deliveries jumped 20% in Q3 from the previous record set in the second quarter. 

A year ago, Tesla delivered 139,300 vehicles in Q3, which at the time was the highest quarterly deliveries in its history. It beat Tesla's previous record of 112,000 vehicles in Q4 2019, despite dealing with the pandemic of last year. 

Meanwhile, Tesla's domestic rival General Motors' vehicle deliveries and production were more affected by the semiconductor shortage. The automaker reported a 33% drop in delivered in Q3, the lowest level in nearly a decade.

Tesla's record third quarter deliveries are also the result of a production ramp up in China, where it produces the Model 3 and Model Y at its factory in Shanghai. Tesla is shipping a higher number of these vehicles to Europe as it faces growing competition in China from startups such as XPeng and NIO Inc.

However, of the 241,300 vehicles Tesla delivered in Q3, only a small number were Model S sedan and Model X SUVs. It appears that Tesla has shifted focus to selling the more affordable and mainstream Model 3 sedan and Model Y crossover. 

Of the 241,300 vehicles Tesla delivered in Q3, a total of 9,275 of them were the flagship Model S and Model X SUVs. Tesla does not break down the sales of individual models, instead its bundles the sales of the Model S and X together, as well as for the Model 3 and Y. 

Tesla said it produced a combined total of 8,941 Model S and X vehicles in Q3.

Now that Tesla has more competition in the EV space from other automakers for the first time, Tesla's push to build its more affordable models will likely continue in Q4. The flagship Model S with its nearly $90,000 price tag and Model X SUV that costs just under $100,000 put the two vehicles out of reach to most consumers, so Tesla has no real incentive to ramp up production. 

The Model S delivery timeline for new customers is April - May 2022, according to Tesla's website. For the Model X SUV, the estimated delivery times are May or June of next year.

With brisk sales of the more affordable Model 3 and Model Y for six consecutive quarters, it appears that the flagship Model S is losing some of its appeal for those in the market for a luxury EV, especially since its costs $90,000 before incentives. 

Tesla's Model S was once virtually unchallenged in the EV segment. Now the company is facing growing competition in the premium EV category with new electric vehicles such as the Mercedes EQS, Porsche Taycan, Lucid Air and Xpeng P7, which gives EV buyers around the world more choices.

In addition, as the world's most valuable automaker with a market cap topping $775,000 billion, Tesla is also under pressure from investors to continue its upward sales momentum. It could be more easily achieved if Tesla focuses on producing the more mainstream and affordable Model 3 and Model Y vehicles.

Although Tesla is giving the Model s a long overdue refresh, its steep price tag all but ensures it will never become a mainstream EV, especially with all of the new competition looming. 

But Tesla's goal using the Model S and Model X SUV to fund the development of future mass-market EVs was finally achieved. So going back to building expensive models may not be the best decision for Tesla going forward. Instead the company should focus on building its rumored $25,000 EV.  

Eric Walz

Originally hailing from New Jersey, Eric is a automotive & technology reporter covering the high-tech industry here in Silicon Valley. He has over 15 years of automotive experience and a bachelors degree in computer science. These skills, combined with technical writing and news reporting, allows him to fully understand and identify new and innovative technologies in the auto industry and beyond. He has worked at Uber on self-driving cars and as a technical writer, helping people to understand and work with technology.