Shares rebound despite Model 3 production miss
Company fell short of its goal of making 2,500 of the sedans per week
Tesla’s first-quarter production and delivery numbers could’ve been better, but on Tuesday they were good enough to bring relief to investors and help the carmaker break its shares’ losing streak.
The company said it made 2,020 Model 3s in the past seven days, failing to meet its weekly production target of 2,500. Still, it reported a 40 percent increase in overall output from the previous quarter and a doubling of weekly production of the Model 3 sedan, its first mass-market vehicle.
Tesla expects to produce 4,000 vehicles next week: 2,000 Model S and X vehicles, and 2,000 Model 3s.
“It is a testament to the ability of the Tesla production team that Model 3 volume now exceeds Model S and Model X combined,” the company said in a news release.
The day before, Tesla CEO Elon Musk effectively confirmed a report by The Information that he had taken over leading the production of the Model 3. Production of Tesla’s cheapest car yet — its base price is $35,000 — is considered key to Tesla’s growth and
revenue.
Musk tweeted annoyance that the report suggested Tesla was having production problems, saying of course he was leading Model 3 production because he needs to focus on what is most critical for the company at the moment.
Tuesday, the Palo Alto company said it made a total of 34,494 vehicles in the first quarter — 24,728 Model S sedans and Model X SUVs, and 9,766 Model 3 sedans — and continues to aim to make 5,000 vehicles a week in the next quarter.
If production goes as planned, revenue should follow, soothing worries about the company’s cash flow.
“Tesla does not require an equity or debt raise this year, apart from standard credit lines,” the company said. Concern about its cash flow and debt, along with a recent recall of 123,000 Model S sedans and renewed questions about its Autopilot technology after a fatal Model X accident, had been weighing on the electric carmaker’s shares.
The company’s optimism about its production helped its shares rebound Tuesday after days of declines and a 22 percent plunge in March. Tesla stock ended the day up 5.96 percent to $267.53.
Tesla said first-quarter deliveries totaled 29,980 vehicles: 11,730 Model S sedans, 10,070 Model X SUVs and 8,180 Model 3 sedans. The Model 3 deliveries fell short of the average 8,800 vehicles expected by analysts surveyed by Bloomberg News.
The company also reported that 6,100 vehicles, 2,040 of which were Model 3s, were on their way to customers.
Tesla touted high “owner happiness” with the Model 3, and said net reservations remained “stable” in the first quarter.
When asked for an updated number of reservations for the car — potential owners plunk down $1,000 for each reservation — a spokesman pointed to the company’s last officially released number of reservations for the Model 3: 455,000.
“We believe demand for the Model 3 will increase as more cars are produced, additional reviews are released, and more consumers have access to the vehicle,” Baird Equity Research analysts wrote in a note to investors Tuesday after Tesla reported the figures.