Tesla investors cheer Model 3, Musk says 'zero' concerns with launch
Tesla (NASDAQ:TSLA) investors were unfazed by the automaker’s wider second-quarter loss, as shares rallied on news that Model 3 orders picked up following the car’s official launch.
The electric car maker has cautioned that its rollout of the Model 3, its first attempt at a mass-market car, would face challenges. At an event to deliver the first 30 Model 3s last week, CEO Elon Musk repeated his warning that Tesla will be in “manufacturing hell†as it ramps up production. But investors have long bet on Tesla’s future, and Musk’s reassurances that the $35,000 Model 3 will be a success refueled the stock on Thursday.
Shares jumped 7% to $348.54 in recent trading. Tesla is up 63% since the start of 2017.
In a post-earnings call with analysts, Musk said Tesla has received 1,800 orders per day since the launch event on July 28. He also reaffirmed Tesla’s production target, saying there should be “zero†concern. Tesla has said it expects to build around 500,000 vehicles in 2018 to meet demand for the Model 3.
“What people should absolutely have zero concern about, zero, is that Tesla will achieve a 10,000 unit production week by the end of next year,†Musk said.
Investors are closely watching the Palo Alto, California-based company as it attempts to rapidly expand production. Tesla’s previous launch, the Model X crossover, faced production delays.
By the end of 2017, Tesla intends on building 5,000 vehicles per week, half of its 2018 goal.
Tesla has received 500,000 orders for the Model 3. Tesla is shipping production models to employees and investors first, saying it will use early adopters to discover quality issues. Also, the first editions of the Model 3 will be more expensive than the sedan’s $35,000 starting price. Tesla has said it will start by building Model 3s that include optional packages.
Tesla reported a net loss of $336 million for the second quarter, more than the $293 million loss it booked in the same period a year ago. On an adjusted basis, Tesla lost $1.33 a share. Wall Street expected a steeper loss of $1.82 a share. Revenue of $2.79 billion also beat expectations.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| TSLA | TESLA INC. | 357.09 | +11.93 | +3.46% |