Tesla Motors Inc Model X Has Larger Opportunity Than Model S

Tesla Motors Inc Model X Has Larger Opportunity Than Model S
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Tesla Motors Inc (NASDAQ:TSLA) stock has received upgrades from several research firms after the company reported its Q2 results and raised FY2015 guidance. Tesla reported revenue of $858 million with $0.11 in non-GAAP earnings, beating Barclays’ estimate of $828 million in sales and $0.05 in EPS. The company delivered 7,579 vehicles during the quarter, slightly below 7,619 units estimated by Barclays analyst Brian A. Johnson.

Tesla estimates to sell 50K Model S and 50K Model X next year

Brian Johnson said in a research note that the volume upside in Model S and Model X shows the company’s strength. Tesla said at the earnings call that it expected annual delivery rate to exceed 100,000 units in FY2015. The company aims to sell 50,000 units of Model S and 50,000 units of Model X next year. Model X pre-orders have already surpassed 12,000. The electric vehicle maker raised its 2014 capex forecast from $650-$850 million to $750-$950 million. Expenses are expected to rise dramatically amid continued development of Model X and expansion of its supercharger, sales and service network.

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Elon Musk, founder of the San Francisco-based company, said the geographical split of deliveries could be 40% Asia, 40% North America and 20% Europe. However, Barclays expects Asia to account for even larger share of sales, driven by China. The company forecasts to deliver only 7,800 units in Q3 due to a temporary factory shutdown. However, deliveries are expected to spike to 13,000 units in the fourth quarter.

Tesla provides clarity around funding of Gigafactory

Tesla Motors Inc (NASDAQ:TSLA) has made some progress on its Gigafactory and provided clarity around funding of the $5 billion project. Panasonic has finally jumped in as a partner. The ground has been broken near Reno, Nevada for the potential Gigafactory site. Tesla will provide about 40% of the total funding, Panasonic will contribute another 30%-40%, while the remaining 20%-30% will come from the state and other industrial partners.

Barclays said Model X demand continues to grow, and Tesla plans to boost production quickly. Though initial steady-state deliveries of Model S and Model X are likely to be equal, the research firm says Model X has a larger opportunity as it capitalizes on the SUV boom. However, Johnson still sees risks in the volume ramp. He has an Equal weight rating on the stock with $220 price target.

Tesla Motors Inc (NASDAQ:TSLA) shares fell 0.85% to $236.50 at 2:17 PM EDT on Tuesday.

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