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What is Tesla’s Next Challenge?

Shankar Narayanan04 mins

Now that Tesla CEO Elon Musk has decided to keep the company public, the market’s attention will have turned immediately towards the next challenge or challenges. The list is quite long.

The Next Set of Challenges:

  1. Can Tesla sustainably produce more than 5,000 cars every week?

  2. Will they reach their self-imposed target of building 6,000 Model 3s Per week before the end of August and also build 2,000 Model S and X per week?

  3. Though Tesla built 49,489 Model S and X during the first half of the year, the company has only delivered 44,100 units. Will they be able to pick up pace of delivery during the third quarter to reach their guidance of 100,000 units for 2018?

  4. How can Tesla get Model 3 gross margin to 15% in Q3 and 20% in Q4?

  5. When will Tesla start shipping Model 3 to overseas customers who are waiting for more than two years?

  6. Will Tesla be cash flow positive in Q3-18 and Q4-18?

  7. Can anyone hide Elon Musk’s phone as part of their clandestine operation to stop him from tweeting?

Our Predictions:

Unlike big-name analysts who refuse to talk about things they said during the previous quarter, we prefer to be accountable for what we say.

Our Recent Performance. So close, but so far. But still better than some. 

  1. We predicted Tesla will build 30,000 Model 3s during the second quarter. The official figure came in at 28,578.

  2. We expected Tesla’s go-private transaction to cost around $26 billion. According to reports, it came in at around $24 billion.

  3. We reported that Tesla is inching closer to building 6,000 Model 3s per week on August 11th, 2018. Bloomberg Tracker is showing weekly production of 6,278 Model 3s on 26th August, 2018.

Our calls for the rest of the year. Hopefully, we will be a lot closer this time. 

  1. We expect Tesla to beat its guidance of 50,000 to 55,000 Model 3s for the third quarter by at least five thousand units.

  2. We expect Tesla to get close to 100,000 Model S and Model X sales for fiscal 2018. 90K to 100K is what we are expecting, depending on how things shape up in China over the next few months – not to mention Norway. Thanks to the trade war in the former and service capacity problems in the latter, these countries could swing that number either way.

  3. We think Tesla will start shipping Model 3 overseas during the fourth quarter of the current fiscal. At the very least, we expect Tesla to start shipping its $64K+ Performance version. Why? To improve the product mix and increase profitability.

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