The market hasn't cheered Tesla's earnings this much in almost two years

by Susie Olson August 5, 2017, 0:21
The market hasn't cheered Tesla's earnings this much in almost two years

The electric vehicle company announced its latest financial results today, only days after holding a handover event in Fremont, CA for the first Model 3 owners to pick up their new electric cars. Seeking Alpha's Alex Cho, who has been warning that shorting Tesla was a very risky bet, credited the big revenue to Tesla producing 13,450 Model S units at an average price of about $90,000 each, and 11,550 of the more expensive in Model X units at an average price of $125,000 for the quarter.

The $US35,000 base-price Model 3 is Tesla's least expensive auto.

Tesla Model 3 CEO Elon Musk has revealed that more than 63,000 pre-orders for the hotly-anticipated Model 3 have been cancelled by customers. Musk said on Twitter in late March that he was "noticing that many people think Model 3 is the "next version" of a Tesla, like iPhone 2 vs 3".

Tesla announced yesterday it is receiving more than 1,800 reservations a day for its affordable electric vehicle model, Tesla Model 3.

Total orders for the group's first mass-market electric vehicle have fallen to 455,000 from 518,000.

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Revenue rose to $US2.79 billion from $US1.27 billion, beating analysts' average estimate of $US2.51 billion, according to Thomson Reuters I/B/E/S. The company said the important new vehicle is on track with management's previously stated production targets, including a target of achieving a production rate of 5,000 vehicles per week by the end of this year and 10,000 vehicles per week at some point in 2018. There were also fears of Model 3 cannibalizing Model S sales.

Until Friday, when the first 30 Model 3s were sold to company employees, Tesla had released few details about its newest vehicle and its pricing structure - meant to lower the entry barrier into the company's luxury niche.

Tesla Inc.'s (TSLA) just over 100 stores in the US are useless to anyone looking to buy the Model 3. Tesla is likely to need to raise capital around the first quarter of next year, versus expectations of a capital raise by the second quarter.

Model S demand was increasing, Tesla said, adding that Model S and X deliveries would rise in the second half of 2017.

Those cars will be considerably more expensive than the much-publicized $35k starting price that helped the Model 3 reservations gain traction, mind.

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