Although production has been rocky in the past few months, the shares of electric carmaker Tesla remains resilient. In the after-hours trading on November 5, the company’s shares went up by 7%, bringing its price to rise to $247.
The shares’ upturn is due to the strong outlook for Tesla’s future.
The company clarified that while the demand is there, specific targets for 2015 would not be readily available until before the year comes to a close. The electric carmaker, however, did present confidence in its main product, the Model S sedan, to have a stronger market share in the auto industry by next year. Although Tesla reduced this year’s target for the Model S to 33,000 units, the company predicts a 2015 sale of around 50,000 cars.
Apparently, the strong outlook reflected on the company’s shares, as investors were positive about these targets and plans.
Model X Delayed… Again
The car manufacturer announced a new delay in the release of the much-hyped sports utility vehicle hybrid Model X. In the announcement, Tesla said that the Model X – which will be the company’s third unit in its lineup – will come out in the third quarter of 2015. The delay pushes the Model X’s release by around three months from its original target date. Tesla said that the delay is to give the company more time to test the new SUV before it becomes available to the public.
In a letter addressed to the shareholders, Tesla CEO Elon Musk said that the company would rather “forgo revenue, rather than bring a product to the market that does not delight customers.” In the same letter, Tesla’s top exec said that the move will affect the company positively in the long term, even though its short-term effect appears negative.
Tesla closed down its factory in California for one month to prepare for the production of the Model X. The move compelled the company to cut down on production by as much as 2,000 cars. Despite the shortfall, Tesla still delivered a record production of 7,785 units. Nonetheless, the figure did not meet the analysts’ expectation of 7,902 cars.
Tesla also laid bare its plans for the future. After announcing its third quarter profit, the electric car pioneer predicted a 50% increase in the total deliveries and orders of the Model S sedan. To meet the demand, Tesla plans to simplify the manufacturing process of the Model S, reducing the number of customization options for customers in the process.