Yahoo Finance's Rick Newman breaks down the newest delivery numbers from Tesla.

Video Transcript

MYLES UDLAND: A little bit of breaking news from one of our favorite companies, Tesla, here in the after hours session. The stock is up in excess of 11% right now. The company coming out and saying in the first quarter, it delivered 88,400 vehicles. That is well in excess of expectations, which were right around 78,000 for the first quarter.

The company said it delivered 76,200 Model 3s and Ys, 12,200 S's and X's. The company coming out here and saying that its Shanghai factory continued to achieve record levels of production despite significant setbacks. In a sea of bad news from basically every company withdrawing guidance, missing numbers, Rick, for Tesla to come out and say, actually, everything's fine and don't worry about this whole coronavirus thing, and the stock to get this kind of reaction, it's very much out of step with where reality seems to be right now.

RICK NEWMAN: No, no, no. Everything is not fine. So I think the stock is rallying simply because they beat expectations for a diminished quarter. But as you mentioned, they were below the prior quarter sales. And this is for the quarter. This is not for the month.

So in a way, this masks what has been happening in March. And Tesla's California factory has now been shut down, just like all the factories for Ford and GM and the other automakers here. So this does not zero in on March results, which are going to be way worse.

So this is an asterisk, Myles. I'm not sure we can even tell much from this. We do know that it's good news for Tesla that they've got the Model Y. It's coming out the door now. That's the crossover. They really need that. That's the type of car people want to buy more than a sedan.

But when we find out what Tesla has to say for April and May, I think it could be as ugly as it has been for some of the other automakers. I mean, they're not making cars right now-- here in the United States, anyway.

ANDY SERWER: Oh, Rick, Rick, Rick.

RICK NEWMAN: Sorry.

ANDY SERWER: Come on now. Just to take a slightly divergent take on this, I don't disagree. I mean, obviously, everyone's going to get hit. But I guess I'm just speaking to the people who thought that this was going to be an existential time for this company and that there was a binary question here where it's like, it's going to go toast. And I don't think so at all, and I think that, you know, it's very possible this company could be in a stronger position after all is said and done than before.

Certainly just on a relative basis, Rick, if you look at the other traditional automakers, they're not going to be making a lot of hay during this time. And so I just think on a relative basis that this company might be actually a little bit in a better shape than its ilk.

RICK NEWMAN: You know, I mean, I think the whole industry is just on pause. I mean, so when we start to see numbers that don't include sales periods from before the virus, I think they're going to-- they're going to be-- they have to be terrible for everybody because everyone's factories are closed and so are the dealerships, or the stores, in Tesla's case.

Here's the concern with Tesla. The sort of new thing here is with oil prices so low, that means gas prices are going to be really, really low for a considerable period of time. If one of your motivations to buy an electric vehicle is to save on gas prices, well, that just went out the window.

I think that does not apply that much to Tesla because people who want to buy Tesla vehicles generally are wealthy to start with. They don't care that much about gas prices. And they've been-- you know, we've had pretty cheap gas anyway. So that is the existential concern for Tesla. I don't think that low gas prices are going to hurt them that much.

But it could become a factor, because Tesla does need to reach lower into the-- you know, into the consumer chain and reach middle market consumers. So maybe the sell becomes a little harder there if gas is cheap. But, you know, we're going to see a-- it's going to be a wait and see period for the whole industry for at least a couple of months.

JEN ROGERS: In terms of Andy's point about the existential threat, I mean, we've covered the fact that they did their capital raise at a really opportune time, that $2 billion that they raised basically at a high point. So the balance sheet does look good, but Rick, I'm curious if you think Tesla's going to have to get into the discounting game here in the financing game in a tougher way.

If you go out and look at what the other auto dealers are doing right now, I mean, GM has 0% financing for 84 months I think on many brands. There are so many incentives out there. Tesla is this luxury item and that the lines of, you know, people that have wanted them, they haven't had to play that game. Do you think they'll have to?

RICK NEWMAN: It's a great-- it's a real test for Tesla in a way that they're going to have to decide how much pain do they want to absorb to maintain that premium image the way Apple does, for existence-- example. Apple does not really discount, although you can sort of get the last-- the prior model for cheaper. 0% financing is actually a smart thing to do right now because that's a way of discounting without discounting. So you're not taking it off the sticker price. But you're still helping the buyer lower the monthly payment.

And let's face it. It's a lot easier to offer 0% financing when interest rates are already so low to start with. I mean, interest rates on auto loans are probably around 4% or 5% if you have good credit right now. So it's not nothing to the automakers, but that's a way to do it. Tesla is going to have to make some tough decisions.

And you know, the bigger Tesla gets, the more they have to play by the same rules that the other other automakers play by. They're still a niche automaker, so with a premium customer base, so they can probably hold out on price cutting. But they're going to face the same-- I mean, this is a demand shock. And they're going to face that problem just like everybody else.