Prices for shares of Tesla, Inc. (TSLA) popped Monday morning after the electric car maker reported record delivery numbers for the third quarter over the weekend. The company said that it delivered 241,300 vehicles in the third quarter, an increase of 73% from same period last year. That figure also brings Tesla's total delivery numbers for this year to 627,000 vehicles, up 100% as compared to 2020 figures.

Analysts' consensus estimate for the company's numbers was between 220,000 and 225,000. Tesla's shares jumped by almost 4% from their closing price on Friday. As of this writing, they were changing hands at $803.21, an increase of 3.61% from Friday's price.

Key Takeaways

  • Tesla share prices popped on Monday morning after investors digested good news about record deliveries in the third quarter.
  • Tesla achieved the feat in the face of difficult operating conditions.
  • The company should gear up for increased competition from established car makers in the coming quarters.

A Pandemic Record 

Tesla produced a total of 237,823 vehicles in the third quarter of 2021. Out of that figure, 228,882 vehicles were Model 3 or Model Y cars—its mid-range cars targeted at price-conscious customers. The company also produced 8,941 editions of its pricier best-seller sedans Model S and Model X.

Tesla's latest numbers continue a winning streak from last quarter, when it surpassed the 200,000-car delivery figure for the first time since it began reporting earnings. Tesla's figures are even more impressive when you consider that they were achieved despite pandemic-induced supply chain bottlenecks and a chip shortage that has hamstrung operations in the car industry.

Delivery numbers for General Motors Company (GM) in the United States were down by 33% to 446,997 vehicles in the third quarter. GM, which is the biggest car company by sales, blamed the chip shortage plaguing the car industry for its disappointing figures. Ford Motor Company (F) delivered 400,793 cars, a drop of 27.4% from last year, in the third quarter. Meanwhile, Toyota Motor Corp. (TM) reported sales of 566,005 cars, an increase of 1.4% from the same period last year. 

However, those figures may not be enough to offset an estimated overall decline of car sales to 12.4 million, the lowest since May 2020, based on data from Wards Intelligence.

How Did Tesla Achieve Its Record Figure? 

Tesla benefited from a couple of factors. First, it has regulatory tailwinds to boost sales. In the United States, the Biden administration has tabled legislation to make electric cars cheaper and is planning to build infrastructure to support electric vehicles. Car prices rose during the pandemic due to an inventory crunch, and many customers put off purchase decisions. Tesla vehicles are already among the most heavily subsidized electric vehicles in China.

According to Wedbush analyst Dan Ives, Tesla also has a more efficient supply chain as compared to other car companies. The efficiency worked in favor of Tesla when it came to sourcing chips or coping with their shortage. Tesla CEO Elon Musk told analysts that the company had taken to writing its own firmware—software instructions used for communication between different machine parts. It also finished production of cars with missing parts, often adding them later. "Ford and GM among others have very complex supply chain which put them in the eye of the storm," said Ives.

Tesla's Shanghai factory, which began producing cars right before the pandemic, may have also played a role in boosting delivery numbers. It has been less affected by the chip shortage due to its proximity to chip suppliers in Asia, according to Ives. The facility makes Model 3s and Model Ys for markets in Europe and China. According to figures from the China Passenger Car Association (CPCA), the facility is on track to deliver 300,000 vehicles in the first nine months of this year.

While Tesla has managed to weather the chip shortage this period, it might have more competition in the coming quarters. The supply chain situation is set to improve.

"As we look to the fourth quarter, a steady flow of vehicles held at plants will continue to be released to dealers, we are restarting production at key crossover and car plants, and we look forward to a more stable operating environment through the fall," Steve Carlisle, GM's executive vice president and president of North America, stated in a release.

A hint of things to come might lie in Ford's release this morning, stating that it has already received more than 150,000 reservations for its electric pickup SUV. To that end, Tesla will have to gear up for more competition for customer dollars.