Tesla, the electric car manufacturer, has announced mixed results for the second quarter of this year with higher sales and higher losses.
Revenue for this quarter was $1.3 billion, higher than the same period a year ago. However, losses rose also to $293 million putting doubts on its capacity to turn a profit and when. The stock price rose to $225 nonetheless.
A new model, a new factory and a big acquisition
During the previous three months, the company finished the design of its new car the Model 3, a stylish sedan. The model is expected to launch next year and aims to open a new market segment for the company.
New upgrades of Model S and Model X were introduced during the same period.
Tesla confirmed the progression in the construction of its giant battery factory named Gigafactory in Nevada geared towards mass production. The launch of the company is expected to coincide with the launch of the Model 3.
The company went through the final steps and agreements to acquire SolarCity, a solar panel producer and installer. This move is intended to create synergies and cost savings as well as a vertical integration with Tesla’s products. The deal will cost $2.6 billion.
To support its rapid development, the company raised $1.7 billion by issuing new equity leaving it with $3.25 billion in cash.
Production capacity in line with expectations
14,000 new vehicles were sold the second quarter, and 50,000 are expected to be delivered during the remainder of the year. Tesla claims to be the market leader for similarly priced cars in North America and Europe.
The company plans to open one new store every four days for the remainder of the year to boost its network.
Tesla is the only integrated car producer thanks to its owned stores. Other companies use a network of independent dealers.
Production capacity has been consistently rising quarter after quarter. It is at nearly 2,000 vehicles per week at Q2 end and is forecast at 2,200 by the end of the third quarter. The company produced 18,000 cars this quarter with plans for a total production capacity of 500,000 vehicles in 2018.
Tesla is performing on a market segment of its own with no direct competitors. Other car companies are all lagging behind regarding bringing to market a viable electric car.
