Tesla motors beat the odds and has reached 4th position in the best selling passenger car in the US and could pass Toyota Camry in Q4 to become the No. 1 selling passenger car in the US. This news would be music to the ears for fans of the storied firm, which has also faced the biggest amount of ‘shorting’ from stock sellers counting on the challenges to get worse for the firm. The odds of those short sellers getting an easy exit just became tougher, one would imagine.
During the third quarter, Tesla produced a total of 80,142 electric cars, 50% more than the company’s prior all-time high in Q2 2018. Tesla produced 53,239 Model 3, as well as 26,903 Model S and X vehicles.
Tesla sales are projected to grow from $4B last quarter to $6.78B this quarter. No matter how you look at those numbers, it’s an impressive increase in production capacity. Undoubtedly, this is Tesla’s most impressive quarter to date in terms of production.
There were some ups and downs for Model 3 production and Tesla clearly didn’t achieve its goal of 6,000 units per week, but over 50% increase from all-time high Q2 is still incredible.
It has not been easy for Tesla, and particularly its CEO, Elon Musk. It is not difficult to see that Musk’s status as a rock-star CEO has served Tesla well, but at the same time, some of Musk’s personal mistakes have also negatively affected the electric car maker.
Musk settled with the SEC in September, agreeing to pay a total penalty of $40 million, comprised of a $20 million personal fine and another $20 million fine for Tesla, for tweeting recklessly about a possible deal, that never materialised. Part of the settlement also included Musk’s resignation as Chairman of Tesla’s Board of Directors, the appointment of two new independent directors, as well.
Tesla is set to tackle even more ambitious targets in Q4. Tesla’s Model 3 production ramp, which is now hitting its stride, is expected to hit a steady pace of producing 10,000 Model 3 per week. Preparations for the initial production of the $35,000 Standard trim Model 3, which is expected to enter production early next year, will also continue.
With this Tesla announced that they are ramping up the construction timeline of Gigafactory 3 in Shanghai. Originally, production at half capacity was supposed to begin only two years after ground was broken in Shanghai. Full capacity was expected to be reached after another two or three years after initial production began. In light of Tesla recently disclosing that they are facing a 40% tariff on cars sold in China, the company has now announced plans to shorten the previously mentioned timeline.
Ignoring trouble at home, Tesla Starts Hiring For Shanghai Gigafactory
The Chinese government provides incentives for local manufacturers, giving 15% off MSRP(manufacturer’s suggested retail price) for each EV. Tesla will be able to capitalize on this once Gigafactory 3 is complete. A factory that is producing cars in China will allow Tesla to completely bypass this tariff and qualify it for the reduced MSRP, resulting in the ability to bring their vehicles to a greater portion of the Chinese population. This will also increase their full production capabilities; Gigafactory 3 is predicted to produce 500,000 vehicles annually upon completion (as is the Fremont factory), resulting in their total production doubling.
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