That's welcome news for Tesla, but the Palo Alto, Calif. -based company's executives have yet to secure a deal to open an assembly plant in China, despite negotiating with Shanghai's government for more than a year.
Somewhat unexpected, revenues from the company's "Energy Generation and Storage" more than doubled Y-o-Y to $375 million, up from $151 million in Q1 2017. This is due to the company's lower-than-expected production of the Model 3 cars.
Tesla said it produced 2,270 Model 3s per week in the last week of April, up from 2,250 in the second week of the month. Tesla is fully aware of this and plans to celebrate 10,000 Model 3 vehicles manufactured per week by the end of 2019.
Mr. Musk has acknowledged that Tesla erred in trying to build a highly automated production line to assemble the Model 3, noting that getting robots and other machinery to work in harmony has proved to be more hard than he expected. The target for gross margin is expected to remain at around 25 percent, but Tesla surprised itself by ending up with a significantly higher selling price per vehicle than it had initially projected. In March, the group estimated that Tesla delivered 3,820.
Tesla's other main vehicles, the Model S and Model X, start around $70,000, and go well above the $100,000 mark when extra amenities and specialized technologies are included in the vehicle.
Product quality: Solving the Model 3 production doesn't just mean producing more.
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In his recent email, Musk said the company will add 400 people per week at both factories for several weeks to meet the ambitious production goals.
Tesla said that it expects to achieve profitability in the second half of 2018, as long as it executes "according to our plans". ValuEngine upgraded shares of Tesla from a "sell" rating to a "hold" rating in a research report on Sunday, December 31st.
Elon Musk reportedly has a net worth over $20 billion.
Also, Musk has an obligation to himself to keep Tesla afloat considering that much of his own wealth is tied into the company. Shares were down over 5% in after-hours trading as of this writing. This may be a hint that ties into another piece of information that he gave later in the call that all future Gigafactory sites would have vehicle production facilities built in, and that the company was working with the Chinese government on securing a location there. "The boring questions can also be categorized as the tough ones", AutoPacific analyst Dave Sullivan tells Bloomberg.
"We're going to YouTube", Musk replied, apparently referring to the nickname of a caller.
It's a decision that has frustrated some would-be Model 3 owners, who have found themselves without the typical lease option when it comes to actually converting their reservation into a full order.