That helped ease anxiety for investors, who were confronted late Wednesday with a second-quarter loss excluding items that amounted to $1.06 a share – more than twice the 52-cent per-share loss Wall Street had anticipated, according to Thomson Reuters.
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Tesla reported that almost half of its second quarter production occurred in the final four weeks of the quarter.
Some investors have questioned the viability of the deal as both Tesla and SolarCity continue to report losses. Shares were trading about flat in after-hours trading at the time of this writing.
Tesla affirmed its capital expenditure goal for 2016 at US$2.25 billion to support the production plan for Model 3, whose launch is expected next year, as scheduled.
Total operating expenses rose to $512.8 million from $383.6 million a year ago. Certain features, particularly the utility vehicle’s gull-wing doors and second-row seats, have thrown a wrench into the process.
This ease in preparing the Model Y could also be the reason why Tesla CEO Elon Musk believes that the vehicle would be able to command up to 1 million units of demand per year. “Man, it was hell”. Now the production line is humming, and our suppliers mostly have their [expletive] together.
The Model 3 will be the overwhelming focus of Tesla Motors moving forward, Musk said, as it looks forward to what it expects to be a profitable second half. He also said he will replace suppliers who can not be ready in time. Later this year it will begin construction on Model 3 body and general assembly centers.
“The key is that Tesla reiterated 500,000 vehicles in 2018”, said Dougherty & Co. analyst Charlie Anderson.
The update also said that Tesla is “accelerating store openings and plans to add a new retail location every four days on average during the remainder of Q3 and through Q4”.
Musk declined to comment on any product announcements, but did say that Tesla’s self-driving cars will be here soon and they won’t disappoint.
The company said that it finished the second quarter consistently making 2,000 vehicles per week.
Musk said issues with suppliers were among the reasons for the agonizing ramp-up in production for the Model X SUV, which went on sale in fall a year ago. The minibus and truck production ramp-up, however, will not interfere with other models coming first.
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“The priority vehicle development after the Model 3 would be the Model Y, the compact SUV, because that’s also a auto that where we expect to see demand in the 500,000 to 1 million unit per year level”, Musk said.
