Tesla appears to still be getting a lot of interest in the Model S, and in the company’s earnings report today it said there was a further increase in net Model S orders since the Model 3 handover event, though it said it was “too early to draw strong conclusions.”
While Tesla looks to broaden to a wider base of consumers, a signal like this could be a good one for the company going forward as its existing sweet spot has been luxury car owners. Tesla reported a better-than-expected second quarter, with revenue of $2.79 billion and a loss of $1.33 per share. There’s a laundry list of technical terms in its earnings release, but the main thing to note here is that the outlook for the company may be better than expected as it starts delivering the Model 3.
“This growing demand gives us even more reason to expect increased deliveries of Model S and Model X in the second half of this year,” the company said in the release.
Wall Street expected the company to post a loss of around $1.88 per share on revenue of $2.5 billion. With that beat, shares of Tesla were up around 4 percent after the earnings release came out. Tesla said it delivered 22,026 Model S and Model X vehicles this quarter for a total of 47,077 vehicles in the first half of the year. The latter falls into the low end of the production range Tesla said it expected to hit (between 47,000 and 50,000 vehicles) during its last earnings report.
Tesla began its first very early Model 3 rollout late last month, starting up the process of the company hoping to reach a broader audience beyond wealthy car enthusiasts. The Model 3, while it has a large price tag, is geared more toward the average consumer as a similar driving experience (like sitting in an iPod) with a long driving range and a smaller price point. In theory, this would help the company branch into larger competition with existing car manufacturers. Since that handover last month, the company said it is averaging more than 1,800 net Model 3 reservations per day.
Of course, that’s a while away. The company says it hopes to begin producing 100 in August, 1,500 by September, and then as many as 20,000 vehicles per month in December. It’s a slow ramp up as the company hopes to hit a run rate of producing 500,000 vehicles per year by the end of 2018. Tesla has received more than 400,000 orders to date, and it looks like it’s going to take a while for the company to fulfill all those requests.
That doesn’t seem to bother Wall Street, however. In the past 12 months, Tesla’s stock has risen more than 40 percent, and it’s up more than 50 percent since the beginning of the year. Wall Street still hammered the stock in recent months following a blistering report from Goldman Sachs.