• by Thom Forbes  @tforbes, July 3, 2019

To the delight of after-hours traders, Tesla yesterday announced  that it actually did what CEO Elon Musk suggested it might in a email that leaked its way to Bloomberg in May: It delivered a record-setting 95,200 vehicles in the three months that ended June 30. Its stock, which has tumbled 33% over the past year, rose as much as 7.1% before today’s market opened in the U.S.

“Tesla benefited from a full quarter of selling the Model 3, its most affordable car, in Europe and China. Deliveries to those markets began about halfway through the first quarter,” writes Neal E. Boudette for the New York Times.

“It delivered 77,550 Model 3s, up more than 50% from the first quarter. Combined sales of the more expensive and profitable Model S full-size sedan and the Model X sport utility vehicle also improved to 17,650 vehicles, from 12,100 in the first quarter. But the total was well below the 27,550 delivered in the fourth quarter.

“In the United States market, Tesla reduced prices and offered a lease deal on the Model 3,” Boudette observes. 

“That seemed to get them traction in the market,” Edmunds analyst Jessica Caldwell tells him. “It helped move the needle.”

“Part of the drop in sales Tesla recorded during the first quarter was caused by somewhat unique circumstances. What had been a $7,500 tax credit for Tesla buyers dropped in half as of January 1. So many buyers rushed to buy cars at the end of 2018 to get the full reduction in their federal tax bill. That pulled ahead some sales that otherwise would have been recorded in the first quarter,” Chris Isidore and Jackie Wattles point out  for CNN Business.

“Lower-than-expected sales in the first quarter put pressure on Mr. Musk to deliver improved results. Investors and analysts have expressed concern that demand for the Silicon Valley auto maker’s cars had peaked almost two years after production began of the Model 3. The company has bet the compact car, with a starting price of about $35,000, can help push it from making tens of thousands of cars a year to millions,” writes  Tim Higgins for the Wall Street Journal.

“Mr. Musk set expectations high for 2019 when, amid two consecutive profitable quarters, he promised last year that profit and positive cash flow lay ahead -- now that Tesla had finally learned to build the Model 3 following months of delays and other dramas,” Higgins adds.

On a broader lever, the results provide “further proof that the market for green vehicles in the United States is expanding and that Tesla does not have demand issues,” Jim Press, RML Automotive president and former president of Chrysler and Toyota, tells Wilfred Frost and Sara Eisen on CNBC’s “Closing Bell,” CNBC’s Jesse Pound reports.

“If you look at Tesla’s production, half of their sales up to the beginning of this year have been in the state of California,” Press says. “A lot of this growth now for them has been outside of California, and that shows that demand is growing for green vehicles throughout the country, and actually in other markets as well outside the United States.”

“Press said he expects to see more competition from major manufacturers for Tesla in the green car market in the coming quarters,” Pound adds.

Besides the leaked email, “Musk, who often makes highly ambitious predictions when it comes to Tesla’s sales and production, told shareholders at the company’s annual meeting in June that the quarterly numbers were likely to be strong,” recounts Alan Ohnsman for Forbes. 

“The quarterly deliveries were higher than many equity analysts expected, including Barclays' Brian Johnson and Cowen’s Jeffrey Osborne, both of whom anticipated about 85,000 units. Regardless, the results are far above the disappointing 63,000 vehicles Tesla delivered in the first quarter, which was far below consensus expectations and which helped push down the company’s shares,” Ohnsman observes.

In “classic Tesla fashion,” there was also bad news yesterday, reports Jalopnik’s Aaron Gordon. 

“Two executives are not sticking around to find out where the Tesla story goes from here. Bloomberg reports Jan Oehmicke, the head of Tesla’s European operations, is out, and Business Insider says Steve MacManus, vice president of interior and exterior engineering, also left the company. Losing executives is nothing new for Tesla, having faced a mass exodus of higher-ups last year that were largely replaced from within,” Gordon writes.

But they’re probably headed toward their Independence Day festivities in eco-friendly Teslas nonetheless. 

Enjoy your holiday; we’ll see you Monday.