Yesterday, Telsa released production and delivery numbers for the 2nd quarter. Wall Street had been expecting a pretty good result but the company beat those estimates by quite a bit.

For the quarter, Tesla reported global production of 479,700 units with deliveries of 466,140. The delivery figure easily topped Wall Street consensus estimates of 448,599 units, as well as the prior quarter’s total of 422,875. Both production and delivery totals for the second quarter were all-time records for Tesla.

In case that wasn’t clear, a survey of Wall Street analysts estimated the delivery number this quarter would 448,599 and the actual number was 466,140. That’s about a 4% difference. It’s even more dramatic when you compare it to Q2 of last year.

Tesla said total production rose 85.5% to nearly 480,000 vehicles in the three months ended June 30, from a year earlier.

To be fair, last year the 2nd quarter was interrupted by some COVID shutdowns at the factory in Shanghai. Still, one analyst called it a “trophy case quarter” for Tesla.

This was a massive delivery beat and will send the Tesla bears back into hibernation mode. The price cuts was a smart poker move for Tesla and paying major dividends in the field especially for the China market. This was a trophy case quarter for Musk & Co. 🏆🐂🔥♟️🍿

— Dan Ives (@DivesTech) July 2, 2023

As a result the stock is up again today by 6-7% as I write this.

This followed a week in which the company got more good news about the adoption of its North American Charging Standard. In addition to Ford and GM jumping on board, competitors Polestar and Volvo jumped in last week. More significant, VW said it was in talks with Tesla about possibly using NACS for its cars. The shift to a common standard should help speed up adoption as it reduces the range anxiety that some customers still have.

Why does all of this matter? Well, there are still some people arguing that “there is no real ’emerging market’ for EVs in the United States.” That’s pretty clearly wrong when the leading EV manufacturer is seeing 85% year-over-year growth.

We don’t know exactly how many of the total deliveries were sold in North America but the best estimate from Automotive News is that last quarter Tesla sold about 170,000 cars in the US. That means they outsold BMW and Mercedes combined. That’s not comparing Tesla’s sales to how many EVs BMW and Mercedes sold, that’s total cars of any type. BMW sold 82,466 total vehicles (mostly gasoline powered) in the US in Q1. Mercedes sold 61,531. Tesla also outsold Lexus and Audi that quarter. Sort of sounds like an emerging market to me. It’ll be a few more weeks before we have comparable sales information for Q2 but you can bet it will be similar.

Finally, since Beege has a story coming up about how the math for EVs doesn’t work out, I’ll just point out that the math for EVs does in fact work out. It’s true that EVs actually require more energy to build than the average internal combustion engine (ICE) car because the batteries are energy-intensive to build. About half of that energy use to build the batteries is the result of something called drying rooms. Drying rooms are just what they sound like big rooms that use heat to cook off all of the water used to manufacture the materials that go into the battery cells. Tesla has been working on a dry cell process to produce its 4680 cells which eliminates the need for those drying rooms and cuts the energy used to produce the cells substantially. So it’s likely that over time the energy cost to produce batteries will drop.

In any case it is true that ICE cars currently start out more “green” than EVs. But the time it takes a gas powered car to make up that difference can be very short. Reuters did its own analysis back in June 2021.

You glide silently out of the Tesla showroom in your sleek new electric Model 3, satisfied you’re looking great and doing your bit for the planet.

But keep going – you’ll have to drive another 13,500 miles (21,725 km) before you’re doing less harm to the environment than a gas-guzzling saloon.

That’s the result of a Reuters analysis of data from a model that calculates the lifetime emissions of vehicles, a hotly debated issue that’s taking center stage as governments around the world push for greener transport to meet climate targets.

The model was developed by the Argonne National Laboratory in Chicago and includes thousands of parameters from the type metals in an electric vehicle (EV) battery to the amount of aluminum or plastic in a car…

The Tesla 3 scenario above was for driving in the United States, where 23% of electricity comes from coal-fired plants, with a 54 kilowatt-hour (kWh) battery and a cathode made of nickel, cobalt and aluminum, among other variables.

It was up against a gasoline-fueled Toyota Corolla weighing 2,955 pounds with a fuel efficiency of 33 miles per gallon. It was assumed both vehicles would travel 173,151 miles during their lifetimes.

So even though the Model 3 weighs about 1,000 pounds more than the Corolla, it’s still going to be more efficient overall in about 13,500 miles which works out to be almost exactly the average number of miles Americans drive in a year.

The average distance driven is different for every driver. But on average, drivers travel 13,476 miles per year on U.S. roads, according to the U.S. Department of Transportation’s Federal Highway Administration (FHWA).

In other words, it would take, on average, one year for the Model 3 to balance out that initial energy deficit from production. Over the lifetime of the vehicle it’s not even close.

Update: This clip offers a pretty good mathematical comparison of how the efficiency of EVs makes up for the fact that batteries aren’t nearly as energy dense as gasoline.