Enlarge /. The parking lot at Tesla's Shanghai plant was full of new cars in October 2020.
Costfoto / Barcroft Media via Getty Images
Tesla broke previous production and delivery records in the fourth quarter of 2020, delivering more than 180,000 vehicles to customers in the past three months. That's 30 percent more than Tesla's Q3 deliveries, which were themselves a record for the company.
For the full year 2020, Tesla delivered 499,550 vehicles to customers. This is 36 percent more than the 367,500 vehicles that Tesla delivered to customers in 2019.
Tesla didn't quite hit the company's self-imposed goal of half a million deliveries for the year. But the error is literally a rounding error and Tesla's 2020 performance is still pretty impressive. The pandemic made 2020 an unusually challenging year for the auto industry. Tesla's Fremont factory, like most of its competitors in the United States, was closed between late March and mid-May.
We can assume that Tesla will deliver many more vehicles in 2021. With a Q4 rate of 180,000 vehicles per quarter, Tesla should be able to deliver more than 720,000 vehicles from its plants in Fremont and Shanghai in 2021. In addition, Tesla is aiming to bring new factories online in Texas and Germany in 2021. While it may not be feasible for Tesla to produce a million vehicles in 2021, it should be easily achievable by 2022. Elon Musk has announced that Tesla should produce 20 million cars a year by the end of the decade.
Tesla needs to expand rapidly to justify its astronomical share price. Tesla's current share price values the company at more than $ 600 billion, far more than any other automaker. This is despite the fact that industry leaders like Toyota, Volkswagen, and GM each produce millions of vehicles a year, while Tesla delivered fewer than half a million last year. Wall Street is apparently betting that Tesla will become a colossus while also generating higher profit margins than the incumbents. Tesla will need far more than four factories to meet these high expectations.
While Tesla vehicle shipments rose overall, sales of the company's high-end S and X models continued to decline in the fourth quarter. These cars haven't seen any significant refresh in years, which leaves consumers with little reason to pay a premium for the newer Model 3 and Y. Tesla delivered 18,920 of these high-end vehicles in the fourth quarter of 2020, up from 19,450 in the fourth quarter of 2019 and far from 27,550 vehicles in the fourth quarter of 2018.
That trend could be reversed later this year with an expected update to the S. Tesla model. Tesla also has several new vehicles in the pipeline. Tesla's semi-truck, cybertruck pickup, and a new roadster sports car are slated to go into production in 2021 – though it's likely that one or two of them won't debut until 2022. The expanded line of products should allow Tesla to keep increasing production without worrying about saturating the market.