Tesla's Production Push Pays Off, But Stock Remains Stagnant
After a second quarter that was anything but hot, Tesla Motors surprised analysts by delivering 24,500 vehicles in the third quarter — a 10,000-unit jump over the previous tally.
The healthy delivery numbers allow CEO Elon Musk to stick to his promise of 50,000 deliveries in the second half of this year, reports Bloomberg. Still, the production boost failed to buoy the company’s stock, meaning Musk’s fundraising plans won’t be easy.
In total, Tesla moved 15,800 Model S sedans and 8,700 Model X SUVs over the past three months, topping estimates by several thousand units. Actual production output totaled 25,185.
The tally was helped by a late June production ramp-up, and a late August email urging employees to get the lead out. In it, Musk pep-talked workers into “building and delivering every car we possibly can, while simultaneously trimming any cost that isn’t critical … ”
Despite the attractive numbers, Tesla stock rose just 1.66 percent this morning. To fund Model 3 production, Musk plans a number of fund-raising actions, including stock offerings. While surpassing a production target is nice, share prices are still down significantly from the start of the year. Whether or not that keeps investors at home remains to be seen.
BNL Finance predicts that Tesla will need to raise $5 billion by the end of the year.
The third quarter saw Tesla dream up new ways to move its existing products, including the addition of a base Model S that retails for $66,000 before government incentives, and a limited two-year lease program.
More by Steph Willems
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Anybody following the stock will see a 4%+ jump in price today, not exactly stagnant even if not record breaking. Still, what pretty much everyone is waiting for is confirmation of the potential offered by the Model 3, which won't see pre-production for another few months outside of testers for in-house use and for NHTSA crash-testing (these have to be completed before the car can be legitimately sold to consumers, IIRC.)
I just hope Musk's workers don't revolt before the Model 3 comes out.
It's silly to hope or expect meeting (or exceeding) production numbers will move a stock up. The Wall St. adage is "buy on rumor, sell on news." This is news.
What will happen to the stock when they hit 200,000 Model S' sold and the tax credit goes away? It looks like they are around 150,000 now. And those 400,000 people who put deposits on the Model 3, only half of them will get that sweet, sweet credit. The other half will come up short. Also, because the credit is non-refundable, does it apply only to the first 200,000 who claim it, or to the first 200,000 cars? I would guess most people buying a 3 would have a $7,500 tax liability, but I'm sure some will not.