Despite losing money last quarter, Tesla shares are still up after their earnings report. Why? Consumers are still learning to accept the electric vehicle, and Musk is banking on his creations to become more mainstream over the next couple years.
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Tesla shares soared about 10% in after-hours trading after the company predicted a 60 to 80% increase in vehicle sales this year and assured it would turn a profit on an attuned basis.
Production: Tesla said Wednesday that it would deliver 80,000 to 90,000 vehicles this year. Tesla has announced it will unveil Model 3 on March 31st, and expects to start production for the same by the end of 2017. Tesla Motors claims the gigafactory will begin producing battery cells in 2017, obviously in sync with launch of Model 3. But the electric auto maker’s shares soared anyway on news that its lower-priced Model 3 sedan is on schedule to be released next year. That expectation was proven at least partially untrue by Tesla’s shipping forecast. Tesla has said that it will have a starting price of about $35,000, which will likely be reduced further by the electric vehicle subsidies on offer in many countries around the world. It was because of the hope that Model X will grow as a big share of its deliveries in the current year.
“In retrospect, it would’ve been a better decision to do fewer things with the first version of Model X and roll out” new features more slowly over time, Musk told investors on a conference call.
Elon Musk, Tesla’s CEO said competition from other companies do not worry him. Revenue came in at $1.75 billion, falling short of the estimates of $1.8 billion. Before the company posted earnings on Wednesday, its shares had lost 38.4% since January 1.
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Tesla’s capital expenses jumped 11.5 percent in the fourth quarter, while its cash reserves dropped to $1.2 billion as of December 31 from $1.9 billion a year earlier. Though Model 3’s price is similar to that of Chevy Bolt, Elon Musk says it will be competing with the likes of BMW 3 series and Audi A4.
