Tesla finished the second quarter with its biggest order book in three years, chief financial officer Vaibhav Taneja said on the earnings call on Wednesday.
“We exited Q2 with our largest order backlog since 2023,” Taneja said, adding that the company is “focused on increasing production at all our factories to meet this demand.”
Shares were trading 4.5% lower at $357 in the after-hours session minutes later, as margins missed Wall Street estimates despite a revenue beat.
What 2023 means
That comparison year is Tesla‘s best.
Deliveries reached 1,808,581 in 2023, a rise of 38.0% and still the company record.
Volumes have fallen in each year since, slipping 1.1% to 1,789,226 in 2024 and 8.6% to 1,636,129 in 2025, leaving last year 9.5% below the peak.
Taneja is therefore describing an order book back at the level of the year before the decline began.
Reaching that record again this year would require an unusually strong second half. Tesla delivered 838,149 vehicles in the first half, up 16.3% year on year, and would need 970,432 more to pass 2023.
That works out at 485,216 a quarter, above the 480,126 just reported and within reach only of the 497,099 record set in the third quarter of 2025.
Passing last year’s total is a lower bar, requiring 797,980 in the second half, or just under 399,000 a quarter.
Four signals pointing the same way
Deliveries of 480,126 exceeded production of 451,758 by 28,368 units, meaning Tesla sold more cars than it built and drew down stock accumulated in the first quarter.
Global vehicle inventory fell to 15 days of supply from 27 three months earlier, a decline of 44.4%.
The shareholder deck identifies what is holding volume back, describing battery pack capacity expansion as “the main limiting factor to near-term vehicle production volume increase.”
Tesla repeated the point in its supporting infrastructure section, saying pack capacity “remains the limiting factor on ramping our vehicle production globally.”
The figure that complicates it
Automotive gross margin excluding regulatory credit sales fell to 16.3% in the quarter from 19.2% in the first, ending four consecutive quarterly increases.
Falling margins alongside a rising backlog is an unusual combination, since discounting to move metal would normally shrink an order book rather than grow it.
The company listed a lower average selling price “inclusive of mix impact” among the drags on operating income, alongside lower regulatory credit revenue, higher operating expenses and energy warranty charges.
Regulatory credit revenue fell to $146 million from $380 million in the first quarter.
Where the volume came from
Growth was geographically lopsided.
Record quarterly deliveries were “supported by record deliveries in several markets,” the company said, naming South Korea, Australia, Colombia, Japan, Taiwan, Thailand, Portugal, the Philippines, Chile, Slovenia and Lithuania.
North America was the one major region where sales did not recover, related to the expiry of the $7,500 federal tax credit in September 2025.
Deliveries from Gigafactory Shanghai reached 89,091 in June, the strongest month of 2026 and an eighth consecutive month of growth, split between 52,920 delivered in China and 36,171 exported. Second-quarter wholesale volumes from the plant rose 32.8%.
European registrations climbed across most large markets in June.
France more than doubled year on year, Sweden rose 56.0%, Portugal and Italy each gained 43.0% and Denmark 39.0%, while Spain managed 5.6% and Norway fell 43.0%.
Tesla registrations across Europe and the United Kingdom reached 118,068 in the first five months of the year, a rise of 57.0%.
Model Y L
The company attributed part of the momentum to a new variant.
“We launched the Model YL in the U.S. market in July,” the deck said.
Customer response had been positive, the company added, “consistent with launches in other markets.”
The three-row Model Y had already supported Chinese volumes before reaching American showrooms this month.
Model 3 and Model Y accounted for 467,762 of the quarter’s deliveries. Other models, covering the Cybertruck and the discontinued Model S and Model X, totalled 12,364, with production in that category down 34.0%.
Context
Revenue of $28.24 billion beat the company-compiled consensus of $27.58 billion.
Operating income fell 57.0% to $398 million for a margin of 1.4%, against the 5.4% analysts had modelled, and non-GAAP earnings of $0.33 a share missed the $0.55 expected.
Capital expenditure reached $5.79 billion, up 142.0%, and free cash flow was negative $1.09 billion.
Shares had closed the regular session 1.3% lower at $374, down 16.8% so far in 2026.
