Tesla investors cheer Model 3, Musk says 'zero' concerns with launch

Tesla Model Y Platform

Hundreds of engineers and investors around the world collectively sighed in relief today as Tesla CEO Elon Musk revealed that he has decided against spending too much time and money on developing a new platform for the company's next vehicle, and will instead use the one they just finished developing.

The entrepreneur revealed the shocking statistic during Tesla's latest quarterly earnings call.

It's been an interesting week for electric vehicle manufacturing mammoth, Tesla (NASDAQ:TSLA), whose share price jumped almost 7 percent on Thursday (August 3), following the release of its Q2 results on Wednesday (August 2).

Sales in the second quarter rose to US$2.79bn from US$1.28bn the same period a year ago.

At the same time, the company reported overall growth in its operations, which include its automotive business and its solar-panel division.

Musk said customers had made more than 500,000 advance reservations for the vehicle, setting the stage for a major test of Tesla's strategy to become a profitable electric carmaker. But the company announced revenues of $2.79 billion in revenue and a 27 percent lower loss of $1.33 per share.

Musk, Ahuja and Straubel expect the Tesla Model 3's profit margin will reach under 20 percent by the end of 2017, and 25 percent by the end of 2018, numbers only seen by traditional automakers' most profitable models. Tesla's most anticipated Model 3 has greatly influenced the results and the waiting list for the cheaper alternative electric vehicle grows longer and longer.

Until Friday, when the first 30 Model 3s were sold to company employees, Tesla had released few details about its newest vehicle and its pricing structure - meant to lower the entry barrier into the company's luxury niche.

The outstanding leader in the auto development and another auto related technological advances, Tesla, managed to report a great quarter performance that greatly buoyed the company's shares in the later trading hours. The number of orders went from approximately 518,000 to 455,000, Musk said.


"This is maybe the best I've ever felt about Tesla to be frank", he continued.

Some analysts have expressed doubt Tesla can meet its goals.

Still, some Wall Street analysts question the overall fundamental viability of the company and began to hit the breaks on Tesla bulls.

"How egregious the cash flow is will be topical for investors", Jeff Osborne, a Cowen & Co. analyst, said in an interview Wednesday before Tesla reported results.

STMicroelectronics marketed with a new class of highly energy efficient 1,200-volt silicon-carbide chips before anyone, which brokerage Liberum stated helped it win the initial deal to provide power chips for the Model 3.

But most attention was focused on the Model 3.

Tesla is also gaining some ground in the marketplace.

"One of our big concerns was that Model S and Model X would suffer with the introduction of the 3, but this has turned out to be the opposite", Musk said.

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