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Tesla Is Reportedly Gearing Up for a Big Quarter-End Delivery Push

Daniel Sparks, The Motley Fool

Electric-car maker Tesla (NASDAQ: TSLA) is asking workers to help find more volunteers to deliver 30,000 vehicles during the last two weeks of the quarter, according to Business Insider. The quarter-end push comes as the company has been ramping up production and deliveries of its Model 3 as Tesla begins selling the vehicle in more markets.

A request for volunteers coincides with the company's aggressive efforts recently to cut costs as it aims to become sustainably profitable. But the high number of vehicles Tesla reportedly needs to deliver in a short period of time raises questions about whether the company will be able to pull it off.

A woman taking a test drive in a Model S

Model S. Image source: Tesla.

Tesla needs to deliver 30,000 vehicles

"We need your help to make more progress in volunteer sign ups," wrote Sanjay Shah, Tesla's senior vice president, in a company email on Friday to department heads, according to Business Insider. "We have to deliver 30,000 more cars in next 15 days."

A quarter-end crunch to get vehicles out the door isn't a new practice for Tesla. Toward the end of its third quarter of 2018, the company invited Tesla owners to help educate new customers as deliveries rose to record levels. During Tesla's fourth quarter, the electric-car maker even purchased some trucking companies to avoid a trucking shortage as quarter-end deliveries ramped up.

Tesla delivered about 91,000 vehicles in its entire fourth quarter of 2018. Squeezing 30,000 deliveries into 15 days, therefore, would require a herculean effort.

Growing pains

Tesla's production and deliveries have skyrocketed recently as the company's new Model 3 finally stabilizes at mass-market production levels. Trailing-12-month vehicle deliveries are up 138% year over year for Tesla, with about 71% of those deliveries taking place in the last two quarters. Building a network to support significantly higher volumes of deliveries has come with some challenges, particularly since Tesla is simultaneously trying to cut costs to boost profitability.

As 2019 unfolds, investors should watch to see whether Tesla takes steps to spread out deliveries more evenly throughout its quarters, reducing its dependence on volunteers and intense quarter-end activity. Unless Tesla can add to its delivery team throughout the year, challenges may persist. The automaker expects a huge jump in deliveries, with management guiding for total 2019 deliveries of 360,000 to 400,000. That implies 45% to 65% year-over-year growth.

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