Super-entrepreneur Elon Musk personifies the old adage of fortune favouring the brave. And just when he really needed it, Musk’s revolutionary motor manufacturer Tesla last night delivered its best ever quarter, with sales for the three months to end September more than double those of a year before. Musk needs all the good news he can get right now as he prepares investors to inject more money into Tesla to fund a smaller version of the luxury electric car (Model 3) and to accelerate the investment into Gigafactory, the company’s massive battery-making facility. The excellent sales numbers will also quieten concerns around the fallout after a Tesla Model S’s fatal “Autopilot” crash in Florida in June. Musk has also been criticised over his intention to merge Tesla with SolarCity, the US’s biggest retail renewable energy business which he co-founded with his cousins Lyndon and Peter Rive. Like Musk, the Rives are originally from Pretoria. – Alec Hogg
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(Bloomberg) — Tesla Motors Inc. delivered 24,500 vehicles in the third quarter, topping analysts’ estimates, after Chief Executive Officer Elon Musk implored employees to boost sales during the period ahead of a plan to raise more capital.
The maker of electric cars and energy storage devices shipped about 15,800 Model S sedans and 8,700 Model X sport-utility vehicles, Palo Alto, California-based Tesla said in a statement Sunday.
The quarter was Tesla’s last chance to show that it can be profitable before it raises money to ramp up production of the new Model 3. Musk urged employees in an Aug. 29 e-mail to work on “building and delivering every car we possibly can.” The company has been taking aggressive measures to keep sales of the Model S and Model X strong while it awaits the smaller, less-expensive Model 3, which isn’t slated to begin volume output until late next year.
The third-quarter deliveries were positive and beat most estimates, said Jeffrey Osborne, an analyst at Cowen & Co., who rates the stock underperform.
“We were looking for 20,500 this quarter with an acceleration in 4Q to get to 50,000 for the second half,” Osborne said by e-mail. “We believe bullish investors were in the 22,000 to 23,000 range.”
Discounting Questions
Yet the company offered no commentary “to allay investor concerns about discounting to make numbers and drive positive cash flow in the quarter,” Osborne wrote. Musk last week urged employees to hew to pricing policies, responding to concerns that Tesla was straying from a long-held policy against discounting its cars.
Tesla on Sunday said its delivery count should be viewed as slightly conservative because it only counts a car if it’s transferred to the customer and all paperwork is correct. The company reiterated that it expected to deliver 50,000 vehicles in the second half.
Tesla introduced a 60-kilowatt-hour Model S in June that starts at $66,000 before federal or state incentives. In August, the automaker added a 100-kwh battery option with additional range. The company also announced a two-year lease on orders placed by Sept. 12.
Output Rises
Tesla produced 25,185 vehicles, 37 percent more than in the second quarter.
Brad Erickson, a Pacific Crest Securities analyst with a neutral rating on Tesla, had estimated third-quarter deliveries at 22,000. In a Sept. 27 note, he said Tesla’s U.S. sales centers were using a deeper discounting formula to boost third-quarter sales.
Tesla is increasing production at its Fremont, California, factory with an eye toward making 500,000 cars a year by 2018, a goal that also depends on the company’s battery factory east of Reno, Nevada, coming online with battery-cell production. Both efforts will require more funding in the fourth quarter, Musk has said.
US🇺🇸 tech companies founded by 1st/2nd generation immigrants:
Apple
Amazon
Oracle
IBM
Uber
Yahoo
EMC
eBay
AT&T
Tesla/SpaceX— Farbod Saraf (@farbodsaraf) October 1, 2016
The third-quarter deliveries figure is a preliminary number that may change slightly in November when the company reports earnings for the period. The automaker releases global sales figures quarterly, instead of the monthly country-by-country results typically announced by other automakers.
