Shares of electric carmaker Tesla Motors’ dropped over 10%
premarket despite beating expectations in Q3. In a matter of minutes last
night, about $2B of Tesla’s market capitalization was lost after the automaker
Earnings were solid and beat projections as losses narrowed to $38M from $111M and revenues climbed to $431M from just $50M at this time last year. Vehicle sales were in line with guidance, which translated into sales of just over 5,500. The company was able to produce about 550 cars per week, which sounds like a good figure, but Tesla CEO Elon Must said the company is production constrained, meaning the company is having trouble getting enough cars into the driveways of all the people who want one.
Tesla’s gross profit margin continues to improve as well, as it hit 21% up from 14% last quarter, but it remained below the target automotive gross margin of 25%. The company hopes to reach this benchmark and sell over 6,000 cars by the end of Q4.
If all goes well, I hope to be able to afford the $70,000 Model S by 2025, which may require also living in it.
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