Tesla Inc (NASDAQ:TSLA) ended its quarter Sunday with 3,300 Model 3 cars left in its inventory, according to an Electrek report, but Baird analysts said demand remands strong.
The analysts said the inventory level was “natural” as Tesla ramped up production to fill orders before the federal tax credit ran out in the new year and called it a “one-time event.”
The clock was ticking for customers looking to score the US$7,500 federal tax credit granted to those who buy new electric vehicles.
As per the credit guidelines, Tesla customers had to have their cars delivered by December 31.
READ: Tesla appoints Oracle founder and Walgreens exec as independent directors as part of SEC reshuffle deal
The number of vehicles, although it may seem high, accounts for less than one week of production and less than about 6% of Baird’s fourth-quarter delivery estimate.
The Electrek report also noted that the number of vehicles wasn’t that high and did not express any concern about demand for the Model 3.
“We continue to believe Model 3 demand remains strong, particularly as the company has not begun international shipments or introduced leasing options, and are buyers on any weakness,” wrote analyst Ben Kallo.
The analyst highlighted “substantial” demand overseas, specifically in Europe and China, and noted that leasing and international deliveries could tap into incremental demand.
Shares of Tesla dipped more than 2% to US$325 in Wednesday pre-market trading.
Contact Lenore Fedow at lenore@proactiveinvestors.com
Follow her on Twitter: @LenoreMariee