Tesla shares fall despite better-than-expected earnings loss

03 May, 2018, 16:01 | Author: Natasha Holloway
  • Tesla says it has 'largely overcome' Model 3 bottlenecks and insists production is on track

Insiders own 23.10% of the company's stock.

With no official Tesla data to fill in the blanks, it looks like Tesla's Model 3 production woes continue into May.

Musk spoke of the lesson in finding the right balance between manual and robotic manufacturing, an issue with which he went public in recent weeks.

One of the more interesting things discussed on the call was Musk's vision for Tesla as it relates to full autonomy.

Shares in Tesla, which is based in Palo Alto, California, fell more than 4 percent in after-hours trading after the earnings report.

In an effort to stave off concerns over Tesla's ability to finally meet production demands for its much-maligned Model 3 launch, CEO Elon Musk and the company are promising a massive hiring spree in order to meet demand.

"I think we're really well-positioned", Musk said, for having "ultimately millions of shared, autonomous electric vehicles".

He elaborated on his point Wednesday, explaining that part of the delay was caused by a robot, which was created to install sound-buffering materials on the Model 3's battery pack. Over the last five years, Tesla has returned about 450% to shareholders, versus the S&P 500's return of 66%.

And then, after further testing, Musk said Tesla found the fiberglass mat wasn't even necessary. Buyers plunk down $1,000 to reserve a Model 3.

Some 400,000 people pre-ordered the Model 3 when it was first announced last June and considering Tesla only managed to produce 2,270 Model 3s last month, you don't need a degree in maths to understand the mountain that it has yet to climb.

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Product quality: Solving the Model 3 production doesn't just mean producing more.

Moody's Investor Service downgraded Tesla's debt into junk territory back in March, warning at the time that Tesla didn't have cash to cover $3.7 billion for normal operations, capital expenses and debt that come due early next year.

"What percentage of your reservations have taken the next step to configure" their Model 3s, Spak asked. Sorry. These questions are so dry.

During the call, Musk also elaborated on the Model 3's trend towards being the dominant midsize luxury sedan in terms of sales in the U.S., besting competitors like the BMW 3-Series and the Mercedes-Benz C-Class.

It's been quite a year for Tesla Inc (NASDAQ:TSLA) and Tesla stock, bouncing between a 52-week high of $389.61 and a $244.59 low, a massive $140 spread.

I'm expecting hostility and frayed nerves, so bring the popcorn. The business is now producing around 2,000 of the vehicles a week versus a targeted 5,000.

But Model 3 production still isn't near the level of 5,000 per week that Musk promised a year ago.

He was on a conference call responding to questions about Tesla's first-quarter results, which showed the company made a record $710m (£523m) net loss and tore through $745.4m (£549m) in cash in the first quarter of the year.

To achieve those Model 3 production numbers, Tesla will shut down its line again this quarter to make modifications, according Mr Musk. The company has a market capitalization of $49,645.56, a P/E ratio of -26.23 and a beta of 1.11.

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