Tesla Posts Record-Breaking Second Quarter Results

Tesla Motor Company

On Tuesday, July 2nd of 2019, Tesla announced that in the second quarter of 2019, it produced (87,048) and delivered (95,200) more vehicles than ever before. The company’s previous production and delivery records had been set in the final quarter of 2018.

Of the 75,531 cars Tesla produced between April and June of 2019, 72,531 were Model 3s. Once again, Tesla has been able to meet and exceed expectations. Automotive analysts had predicted the company would be able to deliver only around 91,000 vehicles during the second quarter, but the success of the Tesla Model 3 cannot be understated.

Produced

Delivered

Model S/X

14,517

17,650

Model 3

72,531

77,550

Total

87,048

95,200

In the wake of their record-setting performance, this week also saw the departure of three high profile executives. Peter Hochholdinger, a Production Vice President was acquired by the electric vehicle startup Lucid. Vice President of Engineering Steve MacManus and Vice President of Tesla Europe, Jan Oehmicke, each also announced their departure from the company this week.

In late May of 2019, a leaked email sent by Tesla Chief Executive Officer, Elon Musk sought to rally staff ahead of an expected record-breaking quarter:

“We already have enough vehicle orders to set a record, but the right cars are not yet all in the right locations,” Musk wrote. “Logistics and final delivery are extremely important, as well as finding demand for vehicle variants that are available locally, but can’t reach people who ordered that variant before end of quarter.”

Last week he followed up that previous email with another enthusiastic push:“There is a lot of speculation regarding our vehicle deliveries this quarter,” Musk said. “The reality is that we are on track to set an all-time record, but it will be very close. However, if we go all out, we can definitely do it!”

Full Text of Elon Musk’s Email: 

As you may have noticed, there is a lot of speculation regarding our vehicle deliveries this quarter. The reality is that we are on track to set an all-time record, but it will be very close. However, if we go all out, we can definitely do it!

We already have enough vehicle orders to set a record, but the right cars are not yet all in the right locations. Logistics and final delivery are extremely important, as well as finding demand for vehicle variants that are available locally, but can’t reach people who ordered that variant before end of quarter.

I have great faith in you. Please let me know if there is anything I can do to help.

Thanks,

Elon

Tesla in 2019: Rebounding and Accelerating Forward

Coming off a decidedly weak performance from the first quarter of 2019, this recent news is an important step forward for a company which despite disrupting an entire industry, has failed to galvanize widespread trust and support of investors. In the first quarter of 2019, Tesla posted a $702 million loss while suggesting it would not be able to earn profits again until at least the third quarter.

In the wake of those results, the company reduced its global workforce by 7% and announced plans to close a large number of its retail locations. Despite reversing that decision and deciding to keep more stores opened then planned, it has not been an easy year for Tesla.

In the third and fourth quarters of 2018, Tesla posted its first back-to-back profitable quarters ever and many investors were inspired. In the time since January however, Tesla’s stock price has dropped by $150 and even with a reported $2 Billion in new investment, Elon Musk told staff in May that the company would still need to undergo rapid cost-cutting endeavors to be able to manage the year.

This most recent news about Tesla’s record-breaking second quarter result has brought it’s stock price back up into the $200 range with a high of $240 realized late on Tuesday after the announcement.

Tesla experienced a great deal of hardship due to challenges for it to deliver vehicles to the key electric vehicle markets of Europe and China. Currently, many believe the company has worked those issues out and is set for continued growth in production, sales and deliveries through the rest of 2019.

Tesla releases production and delivery numbers at the end of every quarter, usually about one month ahead of when it has to report its quarterly financial results. So it will be a few weeks before anyone outside the company knows whether the record quarter brought Tesla close to making a profit again. Tesla

Tesla emphasized this point again on Tuesday saying: “We believe we are well positioned to continue growing total production and deliveries in Q3.” 

View this post on Instagram

Model 3 in Portugal @lourencovc

A post shared by Tesla (@teslamotors) on

Could a Tesla airplane be on the horizon?

On June 30th of 2019, Elon Musk fueled expectations that someday the world might see an electrically-powered commercial airplane released by Tesla.

Musk has long been enthusiastic about the future of transportation and has positioned himself as a thought leader in the space. To date, he has also spoken about projects to create space ships, high speed trains, vertical take-off and landing vehicles, and even a Tesla submarine-like vehicle inspired by his beloved James Bond.

However, for many of these electrically driven concepts to be commercially viable, he believes the energy density of batteries will need to be improved tremendously. Nonetheless, Musk believes this could be possible within the next five years and has directed strategic investment towards reaching these lofty goals.

Elon Musk explains why he believes electric batteries could one day prove to be better fit for high speed aircraft:

“Jet A (kerosene) has much higher energy density than Li-ion, but electric motors weigh much less and convert stored energy to motion better than combustion engines.”

Tesla, Inc. Skunkworks Designing its Electric Future

In Fremont, California, a secretive “skunkworks lab” owned by the Tesla, Inc. is working rigorously to push innovations in electric battery storage technology. Known as the Kato Road Facility, this highly protected research laboratory is just minutes away from where Tesla produces its Model S, X, and 3 cars.

While actual day to day activities are closely guarded, individuals with knowledge of the matter have reported that the research and development teams at Kato Road are focused on prototyping advanced lithium-ion batteries. Tesla hopes that one day, in the near future, it will be able to mass produce its own battery cell technology.

This step towards vertical integration of key electric technology is a longstanding goal for the company. Tesla is hoping that by producing its own battery storage technology, it will be able to drastically reduce the costs associated with its vehicle and other electric products.

More news about these activities are expected to be released later this year when the company is slated to hold a battery and powertrain day for its investors. The company’s recent acquisition of Maxwell and future plans for its proprietary technologies are expected to feature prominently in this meeting.

Tesla Chief Technology Officer JB Straubel and VP for Technology Drew Baglino are key figures in the company’s battery storage research and development.

“It’s more obvious now than it ever was, we need a large-scale solution to cell production,” Straubel is quoted as saying. In a followup comment, Baglino said: “We’re not sitting idly by. We’re taking all the moves required to be masters of our own destiny here, technologically and otherwise. I think through all the experience we’ve developed with partners and otherwise, we will have solutions for this.”

As the Tesla Motor Company moves towards the implementation of its own battery storage technologies, this could mean a change in the company’s relationship with Japanese company Panasonic. That company has invested heavily in Gigafactory 1. Despite these new directions for Tesla, Panasonic Corporation President Kazuhiro Tsuga was positive about the two companies friendly collaborative relationship: “We are making sure that we have a partnership relationship, not a supplier relationship… We continue to have a very solid, very strong relationship with Tesla.”

Source: Business Insider, Elektrek, Teslarati