By Alexandria Sage and Aishwarya Venugopal
Tesla Inc reported quarterly revenue that doubled on Wednesday and a loss that was the electric car maker’s largest ever, but its shares rose after revealing more than 1,800 daily reservations for the Model 3 and predicting increased deliveries of the Model S in the second half of 2017.
Shares rose nearly 9 per cent to US$353.12 in after hours trading.
Despite a warning by Chief Executive Elon Musk last week that the Silicon Valley automaker would face six months of “manufacturing hell” in producing its first Model 3s, investors were enthusiastic that loss-making Tesla still had US$3 billion cash on hand at the end of the second quarter.
Model S demand was increasing, Tesla said, adding that Model S and X deliveries would increase in the second half of the year.
Significant double-digit growth is very good in a luxury car segment that has been broadly struggling, James Albertine, an analyst with Consumer Edge Research, told CNBC.
Bullish investors — who sent Tesla’s share price up 77 per cent from January to a June high of $386.99 — are betting on Musk’s strategy to transform the low-volume automaker into a clean energy and transportation company offering electric semi-trailer trucks, rooftop solar energy systems and large-scale battery storage.
Some analysts believed demand for the company’s Model S and X had plateaued, and Musk has been quick to pitch the Model S as Tesla’s superior, most technologically advanced car.
The company said it expects positive non-GAAP Model 3 gross margins in the fourth quarter, eventually growing to 25 per cent in 2018.
Tesla will begin delivering Model 3s to non-employees in the fourth quarter, it said.
The results came within a week of Tesla’s long anticipated Model 3 launch, where Musk revealed that first off the production line would be a US$44,000 version of the car with a 500 km range. That is significantly higher than the US$35,000 price most customers were anticipating, before incentives. That base model will begin production in January.
Revenue rose to US$2.79 billion from US$1.27 billion, beating analysts’ average estimate of US$2.51 billion, according to Thomson Reuters I/B/E/S.
Excluding items, the company lost US$1.33 per share.