Tesla Motors Inc (NASDAQ:TSLA) released its latest earnings report last night, posting mixed but mostly positive results and beating in earnings per share. Stifel analysts say the automaker’s momentum doesn’t appear to show signs of slowing down and note that management continues to expect more than what they were projecting. However, they maintained their Hold rating on Tesla at this time.
Tesla to hit 100,000 annualized production
In last night’s report, Tesla Motors Inc (NASDAQ:TSLA) reported non-GAAP earnings of 11 cents per share, compared to Stifel’s estimate of 6 cents per share and Wall Street’s 4 cents per share. The automaker expects to begin production on the Model X assembly line next week and expects to see an annualized production rate of 100,000 units by the end of next year.
In a report dated July 31, 2014, analyst James J. Albertine said it doesn’t seem likely that Tesla’s momentum will slow down in the short to medium term. He expects reservations for the automaker’s vehicles to build ahead of the Model X launch and while it continues to release the Model S around the globe.
Tesla’s risk less than other automakers
He notes that Tesla Motors’ plan to build to order carriers “significantly less risk” compared to traditional automakers that have to estimate demand and match it up with scheduled production. He also said since Tela only will have two primary models, its operating structure will probably “leverage nicely” through the beginning phase of the Model X production and possibly through the beginning of the Model 3 later.
He also expects the gigafactory to offer greater opportunities for battery packs to power and utility markets. The analyst isn’t making projections about how many battery packs the facility could produce or the “potential economics” of this opportunity, but he does say that it presents upside to his estimates.
Plans for Tesla’s gigafactory
Tesla Motors Inc (NASDAQ:TSLA) management said last night they expect to finalize the site of its first gigafactory within the next three months, although it did break ground on a site in Nevada in June. The automaker also said that Panasonic Corporation (ADR) (OTCMKTS:PCRFY) (TYO:6752) has been able to boost battery cell production in Japan, thus curbing some of the supply constraints in the previous quarters.
The company also said that the transition into Model X production will bump down the number of Model S sedans by 2,000 for the third quarter. Tesla Motors now expects to produce 9,000 cars in the third quarter, including the two-week idle time during which it halted production entirely.