Tesla CEO Elon Musk presides over the handover of the first Model 3 cars in August 2017. (Tesla via YouTube)
Tesla’s share price took a weird turn today after the company reported its first-quarter financial results and billionaire CEO Elon Musk dissed analysts’ concerns about the Tesla Model 3 mass-market electric car.
The raw numbers reflected Tesla’s efforts to ramp up production over the quarter: Net loss widened to a record $784.6 million for the quarter, but revenue rose to $3.41 billion, outdoing analysts’ estimates.
The key questions have to do with the Model 3, which Musk is counting on to bring the company to profitability by the latter half of this year.
“It’s high time we became profitable,” he said during today’s teleconference for analysts. “The reality is, you’re not a real company until you are.”
Model 3 production surpassed 2,000 cars per week only in the past month or so, which is far behind Musk’s initial timeline. Tesla said it was targeting a 5,000-a-week rate by the end of June, and anticipated turning the gross margin on the Model 3 from slightly negative to break-even by then.
Net reservations for the Model 3, including configured orders that had not yet been delivered, exceeded 450,000 at the end of the quarter, Tesla said.
Musk said Tesla’s operations would undergo some restructuring this month, in part to reduce the number of third-party contractors. “We’re going to scrub the barnacles on that front,” he said. “It’s pretty crazy.”
But when analysts wanted to delve into the details about gross margin, Musk brushed off the questions as “not cool” and “boring.”
“These questions are so dry, they’re killing me,” he said.
Instead, he went to a YouTube channel operator and retail investor named Gali Russell, who asked a series of questions about Tesla’s plan to phase in fully autonomous driving.
In the course of the conversation, Musk repeated his complaints about reports focusing on fatalities involving Tesla cars. “It’s really incredibly irresponsible of any journalist with integrity to write an article that would lead people to believe that Tesla autonomy is less safe, because people might actually turn it off, and then die,” he said.
Around that same time, Tesla’s share prices slumped in after-hours trading by as much as 5.7 percent.
Musk eventually returned to analysts’ questions, touching on such subjects as ride-hailing services (which he said could begin “as soon as the end of next year”), plans for factory expansion (including the fact that every Gigafactory added from now on would build cars as well as batteries) and the Tesla Semi (a project that Musk said was currently getting a lower priority due to the focus on the Model 3).
He also provided some stock advice for traders who speculate on the company that Musk himself has admitted is something of a “drama magnet.”
“Do not buy if volatility is scary,” Musk said.