For Tesla, a quarterly earnings announcement often triggers a drop in the stock price, because nothing less than spectacular success can justify the company’s sky-high valuation. This time, the Seers of Silicon Valley really did disappoint, saying they expect to deliver “50,000 to 55,000” vehicles this year, backing off an earlier target of 55,000. Punishment was swift – TSLA dropped almost 9% in Thursday’s trading.
In a conference call with reporters, Elon Musk said that Model X testing is going well, but warned that production targets can always be derailed by delays. “The Model X is a particularly challenging car to build, maybe the hardest car to build in the world. It’s a complex product, with thousands of suppliers.”
“The pace of progress is really dependent on which supplier is the slowest and least lucky,” said Musk. A one-week delay could reduce quarterly production by 800 units. And because the X and the S are built on the same assembly line, a misstep by a Model X supplier could slow production of both vehicles.
For those who can look past the missed targets and warnings of delays, there was plenty of good news. Demand for the company’s new energy storage products is “really crazy,” with firm orders “well in excess of a billion dollars’ worth of Powerpacks and Powerwalls…we are sold out of what we could make in 2016 at this point.”
A new suite of autopilot features for highway driving and parking is on track to be released to “early-access customers” on August 15, and depending on what issues come up, wide release will be one to two months after that.
This being Tesla, there had to be a hint of some cool secret plan to disrupt yet another industry. This was provided by Adam Jonas of Morgan Stanley, who asked about Steve Jurvetson’s now-famous anecdote about Uber’s intense interest in Tesla self-driving cars. Is this a sales opportunity for Tesla, or could the company cut out the middleman and sell its own ride-sharing services, using autopilot-enabled vehicles? Musk says that this is “an insightful question,” but one that he doesn’t think he should answer.