Tags: Tesla | Elon Musk | sales | earnings

Tesla Falls on Sales Target Cut to as Few as 50,000 Vehicles

Wednesday, 05 Aug 2015 05:33 PM

Tesla Motors Inc. fell in extended trading after the electric-car maker backed off its full-year vehicle sales forecast.

Tesla said it now aims to deliver 50,000 to 55,000 vehicles this year, compared with a previous target of 55,000. The company sees third-quarter production and deliveries of just more than 12,000 vehicles.

The company said it still expects to begin delivering “a small number” of its Model X sport utility vehicles late in the third quarter and final testing is “going well.” But even a one-week delay could reduce output by 800 vehicles, Tesla said.

“Simply put, in a choice between a great product or hitting quarterly numbers, we will take the former,” Chief Executive Officer Elon Musk and Chief Financial Officer Deepak Ahuja said in a letter to shareholders, posted on the company’s website. “To build long-term value, our first priority always has been, and still is, to deliver great cars.”

Musk will discuss the results on a conference call with analysts at 5:30 p.m. New York time.

Tesla stock fell 3 percent to $262.07 at 4:58 p.m. New York time after tumbling as much as 9.3 percent following regular trading. Tesla had gained 21 percent this year through Wednesday’s close, outpacing the 2.4 percent increase by the Russell 1000 Index.

Narrower Loss

The loss excluding some items was 48 cents a share, the Palo Alto, California-based company said. The average of estimates compiled by Bloomberg was for a 60-cent loss.

Tesla also said that the first few deliveries of its long- awaited Model X SUV will begin in September. The carmaker had previously sought to have the car ready in 2013, then by the end of 2014.

“We have been producing release candidate Model X bodies in our new body shop equipped with more than 500 robots as we fine-tune and validate our production processes,” Tesla said in the letter.

Construction on the massive battery factory, called the gigafactory, east of Reno, Nevada, continues, with manufacturing of battery cells, modules and packs beginning early next year. Tesla also said it will ramp up production and delivery of its Tesla Energy suite of batteries for use by homes, commercial businesses and utilities in the fourth quarter.

States like California see energy storage as a critical tool to better manage the electric grid, integrate a growing amount of solar and wind and reduce greenhouse gas emissions. Tesla has said that its stationary batteries have the potential to scale faster than vehicle sales.

Asia Improving

Musk said in the letter that second-quarter Model S orders in Asia “nearly doubled from last quarter, helped by the initial success of our revised China strategy.”

Tesla said last quarter that sales in China are “showing encouraging signs.” The world’s largest auto market has the potential to become Tesla’s biggest customer base, too, but concerns about charging and early mistakes by the sales staff stymied the company’s entry. Now the market is slowing a bit and China’s SUV-loving consumers won’t get the Model X until the first half of next year.

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Tesla Motors Inc. fell in extended trading after the electric-car maker backed off its full-year vehicle sales forecast.
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2015-33-05
Wednesday, 05 Aug 2015 05:33 PM
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