During a conference call with financial analysts following the release of Tesla’s second quarter 2017 earnings after market close yesterday, CEO Elon Musk took some time to try to convey how people should think about the Model 3 production ramp.
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That’s something that Musk already addressed on Friday by talking about how difficult it is to predict the ‘S-Curve’ of a production ramp, but now he emphasized in the strongest way that he thinks the end of the curve will inevitably happen next year:
“What people should absolutely have zero concern about, and I mean 0, is that Tesla will achieve a 10,000 unit production week by the end of next year. […] I think people should really not have any concerns that we won’t reach that outcome from a production rate.”
For those familiar with Musk’s way of speaking, especially when it comes to Tesla, a publicly-traded company, the statement is surprisingly strong since the CEO most often preface those kinds of predictions with things like “my best guess” or “I might be wrong”.
But in this case, Musk showed no doubt and the market heard him since Tesla’s stock rose 6% in pre-market trading.
That’s despite him later having to correct something he said last week during a press briefing. On Friday, Musk said that Model 3 reservations had surged to over half a million, but on the conference call yesterday, he said that he misspoke and wanted to correct his statement:
“To be more accurate, there have been 518,000 gross reservations for Model 3 and then we have 455,000 net reservations. But those cancellations occurred over the course of more than a year. The net gain since Friday, net of cancellations, has been over 1,800 per day – but I just didn’t want to leave people with the wrong impression.”
Musk again added that he doesn’t think those numbers are representative of Model 3 demand because he insists that Tesla is not actually trying to sell the vehicle.
“I think this is inconsequential because with a small amount of effort, we could easily drive the Model 3 reservation number to something much higher, but there’s no point. It’s like if you have a restaurant and you’re serving hamburgers and there’s like a 1 hour wait for a hamburger, do you really want to encourage more people to come order hamburgers? That doesn’t make sense.”
Instead of the burger, Tesla wants people to order Model S and Model X. The company says that they are seeing more Model S orders since the Model 3 event last week, which had been a concern for analysts before due to possible cannibalization between models.
Tesla has updated Model 3 delivery timelines that could definitely help Model S sales in other countries. The company said that they don’t expect to start delivery of Model 3 outside of the US until the second half of 2018 and even later for right-hand drive markets.