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Last night we had Tesla results. This is always exciting for market participants even if you don't invest in the stock. People love to hear what Elon Musk has to say. Here is a quick highlights reel of what happened this quarter. Never a dull quarter for these guys!
The market liked what it saw and the stock surged 10% from it's intra day low. The loss was less than expected and demand for their luxury vehicle's, the Model S and Model X, were higher than expected.
What was absolutely incredible to see was that they are averaging 1 800 Model 3 orders a day. Remember, you need to make a $1 000 deposit to get your order in. That's $1.8m coming in per day. Not bad for a capital hungry business like this. If you want one here in SA, you better get your order in now because that queue is not slowing down. The ability to grow supply will be exponential as they adjust to the scale. They aim to produce 10 000 a week at some point in 2018.
The hype for this product and the long virtual queues smells a lot like apples.
The energy generation and storage business.
They have installed the solar tiles onto various Tesla employee's houses. This will help them find defects along the way. Those will go mainstream soon.
Energy storage is a huge theme. Whether you use wind, solar or hydro, storage is crucial. They have just landed the biggest lithium-ion battery storage project in world in South Australia. It will provide 30 000 homes with stored electricity. This division brought in $286m in revenue, growing 34% from last quarter.
This is not just a car company. It is a software business with self driving car capabilities. It is a utility business with it's energy producing capabilities. It also a battery business. Anyone who needs to store energy (who doesn't) could be a Tesla client, especially since they are the first movers in mass produced lithium batteries for both homes and commercial.
The ride will be wild with many ludicrous modes involved. But we think, with every quarter, Tesla are slowly winning the battle against all odds.