Personal Finance

How Many Model X Will Tesla, Inc. Deliver This Quarter?

A white Model X with falcon wing doors open

As 2018 progresses, Model 3 production and deliveries will undoubtedly be one of the hottest items for Tesla (NASDAQ: TSLA) investors to watch -- and rightly so. The electric-car company is aiming for a ramp-up in Model 3 production to help it go from delivering just over 100,000 vehicles in 2017 to "hundreds of thousands" of vehicles in 2018.

But Tesla's Model X SUV is still relatively new and worth keeping a close eye on. In Tesla's most recent quarter, Model X deliveries hit a record high and were up 38% year over year. Can Model X deliveries climb higher again in the first quarter?

A white Model X with falcon wing doors open

Model X. Image source: Tesla.

Model X: a look back

Launched in late 2015 , the Model X was critical for Tesla at the time. The automaker had hoped the new SUV would ultimately double Tesla's sales volume as Model S sales growth tapered off.

This is almost exactly what happened. At the time of the Model X's launch, Model S annual sales were at about 50,000. In 2017, Tesla delivered about 55,000 Model S and 47,000 Model X.

A bar chart showing Tesla's quarterly vehicle deliveries by model

Data source: Tesla quarterly SEC filings. Chart by author.

The Model X has been integral to both Tesla's continued sales growth and a surge in gross profit. Tesla's annual vehicle sales have risen from about 51,000 in 2015 to 101,000 in 2017. Meanwhile, Model X helped Tesla's annual gross profit surge from about $1 billion to $2.2 billion during this same period. This increase in gross profit has played a vital role in helping Tesla lay the groundwork for its important Model 3 launch and production ramp-up.

In 2018 and beyond, Tesla is hoping Model 3 will serve a similar role for its business as Model X did, but to an even greater degree. Investors, however, should still watch Model X deliveries. After all, the vehicle represents nearly half of Tesla's vehicle sales today.

Model X: a look ahead

Unless Tesla changes its 2018 production plans, investors shouldn't expect much growth in Model X deliveries during the year. Tesla management explicitly said in its fourth-quarter shareholder letter that it plans to keep Model S and X production at current levels.

"We expect Model S and Model X deliveries to be approximately 100,000 in total, constrained by the supply of cells with the old 18650 form factor," Tesla said. The move reflects Tesla's desire to focus on sales of higher-margin Model S and X as management optimizes their options mix, pushing the two vehicles' average selling prices higher.

A Model S and Model X.

A Model S and Model X. Image source: author.

So far, it looks like Tesla will be able to pull this off. Estimated delivery time frames for Model S and X orders placed today have been pushed all the way out until June -- and Tesla says this is simply because of higher demand, not slower production .

With this guidance and commentary in mind, investors should look for first-quarter Model X deliveries to be similar to the 13,000 Model X units Tesla delivered in Q4. But as Tesla optimizes its vehicles' options mix, investors should also look for Tesla's gross margin for combined Model S and X deliveries to start trending higher than the historical level of about 25% the two vehicles have achieved in the past.

10 stocks we like better than Tesla

When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Tesla wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of March 5, 2018

Daniel Sparks owns shares of Tesla. The Motley Fool owns shares of and recommends Tesla. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story


Other Topics


The Motley Fool

Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Learn More