Tesla, the company headed by Elon Musk who is known for his vision, ambition, and innovation is yet to make money despite continuously making headlines for coming up with path breaking technologies and heavy investments. In the latest earnings call, Tesla performed far lower than the expectations as its losses jumped to $293 million at $1.06 per share.
The analysts had expected 52 cents per share on a revenue of $1.62 billion. It, however, earned a revenue of $1.56 billion which was 33% higher than the year earlier but still behind analyst estimates. The operating expenses of Tesla also rose to $512.8 million — an increase of 34% from last year.
However, there was a sigh of relief among investors as the company made improvements in production capacity. It achieved a record production of 18,345 vehicles in the quarter. This was a huge improvement of 43% over the same period last year and 18% from the last quarter. The company delivered 14, 402 new vehicles during this period. Out of these, 9764 were Model S and 4638 Model X cars.
Commenting on the same, Elon Musk said,
Basically we were in production hell for the first six months of this year. Now the production line is humming. Things are really quite stable with the S and X.
Tesla is now consistently manufacturing 2,000 vehicles in a week. It aims to further increase the production and reach 2,400 vehicles per week in the fourth quarter. Notably, Tesla had set a target to deliver 80,000 vehicles this year. However, it has only managed to deliver 30,000 vehicles so far.
But, the company said that they were on track to deliver 50,000 vehicles in the second half of this year. This will enable them to reach the original target of the year. Reaching the production target is crucial for Tesla. This will soothe some of its investors who were reportedly not too happy with its recent $2.6 billion acquisition of SolarCity.
Moreover, there is a huge interest surrounding the upcoming Model 3 of Tesla. The company has already received pre-orders of over 400,000 Model 3 cars. And it won’t do well with the investors and stocks of company if the company fails to meet its production targets.
Even Musk admitted that the company was overwhelmingly focused on Model 3. He also said that Tesla would be profitable in the third and fourth quarters of this year if one ignores the capital for engineering and increasing production of Model 3.