Musk had also expressed as a part of his company’s “Master Plan” that with improvements that can be seen in autonomous technology, Tesla will eventually empower all its vehicles with self-driving aid.
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The electric auto maker reported second-quarter results that included a steeper loss and fewer vehicle deliveries than planned, thanks to production hiccups. It expects to open retail shops on the average of one every four days through the end of the year.
On its missed vehicle delivery targets Musk said: “We were in production hell for the first six months of the year”. By the end of the quarter, the production was about 2,000 cars a week, which as per Musk is “entirely steady”. The automaker has reported losses in each of the last 13 quarters.
He called the Model Y “the obvious priority after the Model 3”.
Tesla stock was near 230, up almost 2%, in afternoon trading in the stock market today, above its 50-day moving average but down 4% in 2016. However, he also said that the time that government rules regulating self-driving cars will likely not be put in place by then, so Tesla’s self-driving vehicles will roll out in some places at different times. The first was the announcement of the compay’s intent to acquire sister company Solar City for $ 2.6 billion in Tesla stock.
Tesla said it delivered 14,402 vehicles in the second quarter – 9,764 Model S sedans and 4,638 Model X crossovers.
The company advised going into the year it would produce between 80,000 and 90,000 Model S and Model X vehicles this year.
Tesla now has only two luxury electric vehicle models – the Model S and the Model X – with its latest and more affordable model, the Model 3, set to be launched late next year. Steady growth in the auto business has made it possible for Musk to broaden his reach into related industries. The company expects that it will be profitable in the next two quarters, except for the capital spending required for engineering and ramping up the production of its mass-market Model 3, which is scheduled to have a base price of almost $35,000.
While much of the production will go toward batteries for vehicles, Tesla has also said it expects rising demand for home and commercial storage battery systems. But in a surprise move, Musk confirmed that these new vehicles are a semi-articulated truck and a minibus, both of which will be electric-only.
“Making cars is hard. and they still are in the growth stage – the market seems to want to give him (Musk) the benefit of the doubt”, said Tigress Financial Partners analyst Ivan Feinseth, who added Tesla “has never met any of their projections”.
According to FBN Securitiess price target of 275 on the company’s stock this indicates the broker now believes there is an increase of 19.39% from Tesla Motors Inc’s current price of 230.34. “They spent more money, which is why EPS was down”.
The company is facing new challenges as it continues to build its business. Musk has hinted that the Model X’s troublesome falcon-wing doors could trickle down to the smaller model.
Stay tuned to The Motley Fool for a closer look at Tesla’s earnings.
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Musk addressed other issues during the conference call.
