Tesla’s delivery numbers fell short of the 100,000 cars CEO Elon Musk hoped to deliver for the three months ending in September.
Tesla (TSLA) delivered approximately 97,000 cars, the company announced Wednesday. Although it missed the 100,000 mark, that’s still a record for the company, outpacing the 95,200 and 63,000 cars it delivered in the two previous quarters.
The number is nearly in line with the 97,500 deliveries Wall Street analysts had projected.
Musk sent an email to employees last week saying Tesla expected to have 110,000 orders for the quarter, and was aiming to deliver as many as possible by Sept. 30.
Tesla’s stock was down 4% in after-hours trading Wednesday.
The company has had a number of challenges in its effort to reach that delivery milestone, including ensuring that its distribution network was properly equipped. In last week’s email, Musk said the “challenge is making sure that we have the right car variants in the right locations and rallying as much as our company resources as possible to help with the end of the quarter deliveries.”
Tesla said Wednesday it is entering the fourth quarter with an order backlog and is focusing on “increasing production to meet that demand.”
Nevertheless, growing delivery numbers are a good sign for Tesla’s revenue as it seeks to again turn a profit after two quarters of losses. Deliveries are the strongest indication of sales because the company is not paid in full for the cars until they are delivered.
The record deliveries number won’t be the only determining factor in Tesla’s ability to return to profitability. In the three months ending in June, then-record delivery numbers helped narrow Tesla’s operating loss, but the company’s overall auto gross margins ticked down slightly and the company posted a $408 million quarterly loss. At the time, Tesla said it was aiming for positive net income in the third quarter.
Wall Street analysts, however, still expect a third quarter loss. But it is is expected to be smaller than in the previous quarter because the average selling price for the best-selling Model 3 has stabilized and its margins have improved, Deutsche Bank analysts wrote in a note to investors Tuesday. The company is expected to report its third quarter earnings later this month.
The third quarter deliveries numbers will make it harder for Tesla to reach its projected full year car delivery numbers. Musk has a history of setting bold goals, and the company has offered guidance of between 360,000 and 400,000 for 2019. The Deutsche Bank analysts said they expect deliveries to reach the low end of that guidance.
But in order to reach even that 360,000 estimate it must set yet another record delivery–of 104,800.