Tesla exceeds expectations and delivers 25,000 cars in the first quarter
To their relief, Tesla Motors, exceeds expectations in having a strong start to the year considering they were expecting the prospect of earnings losses.
Tesla has delivered 25,000 cars during the first quarter which has exceeded their expectations.
2017 is a make-or-break year for the electric car maker so the recent sales will be a needed boost to the morale of the company. This comes in the wake of repeated production delays over the past couple of years.
Experts have questioned whether Elon Musk, the founder of Tesla could make good on his ambitions to produce half a million cars in 2018.
The latest figure would suggest on projections that by the end of the year they will have delivered 100,000 cars.
The company’s goal was to reach 47,000 to 50,000 vehicles during the first half of this year so they are well on course to reach their goal.
The next few months will be a particularly crucial for the company as Tesla roll out the Model 3, which will begin production in July.
The Model 3 is aimed at a mass market audience costing just $35,000, less than half as expensive as the Model S or the Model X crossover SUV.
That could indicate a price tag in Ireland of about €35,000-€38,000, once the VRT and SEAI grants are taken into account.
This will make the Tesla Model 3 competitive with the cheapest BMW 3 Series and Audi A4 diesel models and with the BMW 330e plug-in hybrid.
During the first quarter of 2017, Tesla delivered slightly more Model S cars than the Model X producing 25,418 vehicles which is an increase of 69 per cent over the same period last year.
Although the first quarter has been promising for Tesla, analysts expect the company to report losses of $125m, after adjustments for one-off expenses according to a survey from S&P Capital IQ. This is compared with the losses they made over the same period last year of $121m.
Elon Musk is now considering raising more money from investors to shore up Tesla’s balance sheet due to these losses which is to be expected with a new company in startup mode.
Tesla Motors has an enterprise value of $52bn with the company having only $3.4bn in cash and $8.6bn in debt, according to the latest financial filings.
Some of the once-off expenses that Tesla is the construction and establishment of its manufacturing plants.
The company makes its cars at its factory in Fremont, California and has invested massively in its giant battery factory in Nevada known as the Gigafactory.
Tesla has also taken on a new Chinese backer called Tencent, the tech company that owns WeChat. Tencent disclosed last week that it had bought a 5 per cent stake in Tesla worth more than $2.2bn at current prices.
That purchase makes Tencent the carmaker’s fifth-largest shareholder. Other Investors include T Rowe Price and Baillie Gifford.
As of now, Tesla’s shares stand at $278.30 at Friday’s market close, up 30 per cent from the beginning of the year.