SAN FRANCISCO, Oct 24, 2019 (BSS/AFP) – Tesla shares raced higher in
after-hours trading Wednesday following the company’s announcement that its
factory in China had started production and quarterly financial results that
beat expectations.
Shares in Tesla climbed more than 20 percent after the electric carmaker,
which had been expected to post a loss, reported a profit of $143 million on
revenue of $5.4 billion in the third quarter ending September 30.
Tesla said it is producing vehicles “on a trial basis” at its so-called
Gigafactory in Shanghai, which will help boost global production and sales.
Tesla chief executive Elon Musk was optimistic that the Shanghai factory
could begin cranking out Model Y vehicles by the middle of next year, and
believed the new model has the potential to be a huge seller.
The company has been dogged by concerns it may not be able to ramp up
production to meet demand and that Musk may have overstated Tesla’s goals for
sales and technology improvements.
Musk has predicted the company may be able to deliver self-driving cars by
2020, though analysts are skeptical.
Improvements to “Smart Summon,” a feature that allows owners to summon
their car with a smartphone app, are also expected, he said.
Musk touted the tool as a step toward fully autonomous vehicles and said
that an over-the-air software update will be pushed out in the coming weeks.
– ‘Robotaxi’ future –
Tesla, a contender in the race to produce fully self-driving cars, last
month issued a software update that included “Smart Summon.”
Under the feature, an app acts as a remote control which allows an owner
to beckon their car, although Tesla advised they keep the vehicle in sight
the whole time.
“We have Auto Pilot on the highway, and slow-speed Summon,” Musk said
while discussing the road to self-driving Teslas on an earnings call.
“Now we are working on stop lights, stop signs, windy narrow roads in
suburban neighborhoods… You are going to want all of that.” Tesla could be
at a point where it could upload software for its vehicles to have “robotaxi”
functionality, albeit with a human ready to take control, by the end of this
year, according to Musk.
“I mean the car will drive from one’s house to work, most likely without
interventions,” Musk explained.
“It will still be supervised, but able to fill in the gap from low-speed
autonomy with Summon and high-speed autonomy on the highway.”
A version of the feature “reliable enough that you don’t have to pay
attention” to driving could be ready by the end of next year, but would be
subject to approval by regulators, he added.
– Going home again –
Musk expected the Shanghai factory to hit “volume production” in a few
months, and to make it possible to significantly ramp up Tesla production. He
noted that a battery plant was also being built on the China site.
The shareholder letter said Tesla expects to boost vehicle deliveries and
that “we are highly confident in exceeding 360,000 deliveries this year.”
Tesla said deliveries of its Model 3, the most affordable vehicle in its
lineup and a key to broader sales, reached 79.8 million in the past quarter,
an increase of 50 percent compared to last year.
With Model 3 production pressure lifted, Tesla has been able to return
engineering talent and other resources such as power cell production to its
unit specializing in solar roofs and home power storage packs, according to
Musk.
He felt that the Tesla Energy unit has long-term potential to be as big a
business as its automotive division, or maybe even bigger.
“Now that car production is in a good place, we have restored resources to
Tesla Energy so that is going to see crazy growth,” Musk said.
“Tesla’s mission from the beginning has been to promote development of
sustainable energy and renewable energy vehicles.”