Tesla’s global deliveries rose more than 50% last year, meaning the company surpassed the low end of its sales goals for 2019. But three deaths in accidents involving Teslas continue to raise questions about the safety of the company’s autopilot systems.
The announcement Friday pushed Tesla’s shares up more than 4% to a record high of $449.37. The stock hit a record last week in anticipation of strong sales numbers.
The electric car maker delivered a record of about 112,000 vehicles in the fourth quarter and about 367,500 for the full year.
Tesla, based in Palo Alto, California, had earlier projected deliveries of between 360,000 and 400,000 units worldwide.
The lower-cost Model 3 accounted for 83% of the company’s fourth-quarter sales at 92,550. The higher priced Model S Sedan and Model X large SUV made up the rest.
The sales increase should bode well for Tesla’s fourth-quarter and full-year earnings next month.
Safety investigations
The good sales news is clouded by three crashes involving Teslas that killed three people which have increased scrutiny of the company’s Autopilot driving system just months before CEO Elon Musk has planned to put fully self-driving cars on the streets.
On Sunday, a Tesla Model S sedan left a freeway in Gardena, California, at a high speed, ran a red light and struck a Honda Civic, killing two people inside, police said.
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On the same day, a Tesla Model 3 hit a parked firetruck on an Indiana freeway, killing a passenger in the Tesla.
And on Dec. 7, yet another Model 3 struck a police cruiser on a Connecticut highway, though no one was hurt.
The special crash investigation unit of the National Highway Traffic Safety Administration is looking into the California crash. The agency hasn’t decided whether its special-crash unit will review the crash that occurred Sunday near Terre Haute, Indiana. In both cases, authorities have yet to determine whether Tesla’s Autopilot system was being used.
NHTSA also is investigating the Connecticut crash, in which the driver told police that the car was operating on Autopilot, a Tesla system designed to keep a car in its lane and a safe distance from other vehicles. Autopilot also can change lanes on its own.
Tesla has said repeatedly that its Autopilot system is designed only to assist drivers, who must still pay attention and be ready to intervene at all times. The company contends that Teslas with Autopilot are safer than vehicles without it, but cautions that the system does not prevent all crashes.
Even so, experts and safety advocates say a string of Tesla crashes raises serious questions about whether drivers have become too reliant on Tesla’s technology and whether the company does enough to ensure that drivers keep paying attention. Some critics have said it’s past time for NHTSA to stop investigating and to take action, such as forcing Tesla to make sure drivers pay attention when the system is being used.
NHTSA has started investigations into 13 Tesla crashes dating to at least 2016 in which the agency believes Autopilot was operating. The agency has yet to issue any regulations, though it is studying how it should evaluate similar “advanced driver assist” systems.
“At some point, the question becomes: How much evidence is needed to determine that the way this technology is being used is unsafe?” said Jason Levine, executive director of the nonprofit Center for Auto Safety in Washington. “In this instance, hopefully these tragedies will not be in vain and will lead to something more than an investigation by NHTSA.”
Cautious about sales
The company issued a note of caution about its sales results on Friday, saying that while sales figures are slightly conservative, they could vary by 0.5% or more when final numbers are out. “Vehicle deliveries represent only one measure of the company’s financial performance and should not be relied on as an indicator of quarterly financial results, which depend on a variety of factors” including cost of sales, foreign currency fluctuations and the mix of leased versus sold vehicles, Tesla’s said.
In the third quarter, Tesla posted a surprising $143 million profit, raising hopes that the company, which also makes solar panels and battery storage units, could finally be turning the corner to profitability.
Tesla has posted mostly losses during its first decade as a publicly held company, and it lost $1.1 billion during the first half of last year.
Tesla’s new factory in Shanghai, China, produced just under 1,000 cars for sale and has deliveries have started in the world’s largest car market, the company said in a prepared statement. Tesla broke ground on the factory less than a year ago, and expects to produce more than 3,000 vehicles per week there.
Wedbush analyst Daniel Ives, in a note to investors Friday, wrote that the recent rally in Tesla’s share price was driven in part by short-sellers covering their positions as the stock rose. But the increase also is due to underlying fundamental improvements “as the company’s ability to impressively not just talk the talk but walk the walk has been noticed by the street,” he wrote.
The coming year will be pivotal for Tesla and CEO Elon Musk with the start of production at the Shanghai factory, Ives wrote.
