TESLA RAMPS UP MODEL 3 OUTPUT, SHARES RISE
The electric-car maker Tesla faces challenges in introducing its first mass-market vehicle, but the company’s chief executive, Elon Musk, sought to reassure investors on Wednesday that the company was up to the task.
Tesla may experience some fluctuations in production rates, Musk said, but “people should have zero concerns” about the company’s ability to increase production of the new offering, the Model 3.
Musk’s comments came on a conference call after Tesla announced its second-quarter earnings. Despite the company experiencing a widening loss as it continued to invest in factories to accommodate the Model 3, investors found plenty to like in its prospects. Tesla shares were up more than 7 per cent in extended trading.
Tesla said it lost $401.4 million in the quarter that ended June 30, compared with a loss of $293.2 million in the same period in 2016.
At the same time, the company reported overall growth in its operations, which include its automotive business and its solar-panel division.
Tesla said total revenue for the quarter was $2.79 billion, more than double the $1.27 billion it recorded in the comparable period last year.
Revenue from the company’s auto operations was $2.29 billion, compared with $1.18 billion a year earlier.
Despite the wider loss in the quarter, Musk said the company was on track in many areas — including batteries, solar panels, and maintaining sales of its existing vehicles, the Model S sedan and Model X sport utility vehicle — even as it rolls out the Model 3.
He added that Tesla was starting to look at locations for battery factories in China and Europe, although he said most of its battery production would probably remain in the US.
Although Tesla posted stronger sales of the Model S and the Model X, the biggest challenge it faces is preparing for the introduction of the Model 3, the company’s first foray into the mass market, with prices starting at $35,000.
Tesla has consistently lost money because of heavy spending on research, product development and equipment for its assembly plant in California and its battery factory in Nevada.
Musk has said Tesla is earning good margins on the small number of Model S and Model X vehicles it has sold.