According to the latest report by Bloomberg, Tesla Inc.’s Chief Executive Officer Elon Musk told the company’s shareholders at the annual meeting on Tuesday that consumer demand for their electric vehicles was not an issue, and that sales for this quarter were expected to hit record levels.
Tesla had earlier forecast deliveries of between 90,000 to 100,000 in Q2 of 2019, however, concerns related to demand for the company’s electric vehicles lingered after the first quarter showed a disappointing 63,000 deliveries, which led to the company’s stocks falling a massive 35% year-to-date.
However, at the annual meeting which was held at the Computer History Museum at Mountain View in California, Musk showed great optimism, stating that sales had far exceeded their volume productions and that a large part of the new orders were coming in from new customers, who had no prior reservations.
Musk was emphatic that there was no demand problem. He said that the company had a decent chance of having record sales in the quarter, and that if they did not break previous records, they were going to be very close.
Musk’s comments were welcomed by investors, and Tesla’s shares went up by as much as 5.3% in late trading. This increase in share prices was over and above the 2% gain the company saw before the annual meeting kicked off.
However, Wall Street Analysts did not react as positively, as they raised concerns about the Model 3 Sedan’s sales. According to Daniel Ives, a Wedbush Securities analyst, while Musk and Tesla gave investors more useful information that had been expected at the annual meeting, it still remained a story that needed proving in the short-to-mid-term. He said that an improvement in profitability in the second half of 2019 as well as in the global demand for the Model 3 in this quarter.
At the meeting, Musk said that Tesla is expecting to increase its fleet by 60% to 80% in 2019. Last year, the company had doubled its fleet, however, such rapid expansion made it difficult to remain profitable at this time. He stated that the company could slow down growth, but that would not be good for either the cause of electric vehicles or sustainability.
The CEO of Tesla also stated that they were expecting the Model Y SUV to start volume production by the end of this year, with a target of setting up one car factory on each continent across the globe.
He stated that all the car manufacturing equipment, which included stamping machines, battery module lines and a paint shop, had been installed in Tesla’s Shanghai Gigafactory. However, Musk did not mention the name of the supplier for batteries.
Musk also stated that the company was actively looking for a site for its European plant, and they were hoping to make a decision on the location by the end of 2019.
As a part of his endeavor to cut down the battery supply chain, Musk also said that they were exploring the possibility of raw-material production. He said that they would do whatever was necessary to scale up as fast as they possibly could.
During the meeting, Musk also called out the massive amount of negative media attention that the company, and he, have got, especially from Bloomberg News. A shareholder, who is also the owner of a Model 3 as well as a Model S, stated that people had the perception that Tesla cars were of low quality and shoddy workmanship, that the cars spontaneously combusted and that the company was going to go out of business soon.
Musk said that the only way to counter these perceptions was if shareholders themselves became spokespersons for the company and its products.