Better production and a more humble Elon Musk makes Tesla look like a real car company
At the beginning of July, Elon Musk sent an email to Tesla employees to congratulate them on hitting the long-awaited Model 3 target: 5,000 cars per week. In it, he said that Tesla had become “a real car company” – this week. When the company posted second quarter results, that fact was on display. And, what’s more, Mr. Musk started behaving like a real CEO.
Tesla’s share price jumps on back of the results: +7% in 5 days
SOURCE: Yahoo Finance
Tesla spent less cash than Wall Street expected, and its revenue was slightly higher than expected. Automotive revenue increased 47% year on year, and accelerated by 23% from the first quarter on the year. Tesla is looking to produce as many as 55,000 Model 3’s over the next quarter, doubling its production capacity, According to Musk, who took an opportunity to apologise for insults he directed at analysts last quarter, the company will then start paying off its debts. He said:
“I don’t mean refi-ing them, I mean paying them off. There’s a convert that’s coming due soon -- a couple hundred million, $900 million, something like that -- we expect to pay that off with internally generated cash flow, and still have a healthy cash balance.”
Gene Munster, a managing partner at venture capital firm Loup Ventures, said: “The pieces are now falling into place for a sustainable Tesla story. Before, it took mental gymnastics to get there. His actions on the call were a powerful statement that he’s capable of channeling his energy for the good of the company, and it removes a central concern of Tesla supporters.”
Dominion holds Tesla in its Global Trends Luxury Fund.
If you would you like to receive the Newsfeeds daily, please click here to sign up now!Help us make this Newsfeed better by rating this article. 1 star = Poor and 5 stars = Excellent
- Click here to print this story: Print
The views expressed in this article are those of the author at the date of publication and not necessarily those of Dominion Fund Management Limited. The content of this article is not intended as investment advice and will not be updated after publication. Images, video, quotations from literature and any such material which may be subject to copyright is reproduced in whole or in part in this article on the basis of Fair use as applied to news reporting and journalistic comment on events.