Tesla's shares jump after-hours with "overwhelming" Model 3 response

 
Courtney Goldsmith
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Telsa CEO Elon Musk Unveils New Vehicle
Tesla said orders for its Model 3 were averaging more than 1,800 a day (Source: Getty)

Shares in Elon Musk's Tesla jumped nearly eight per cent in after-hours trading despite a widening loss as the company revealed an average of more than 1,800 daily reservations for its Model 3 car.

For the three months ended 30 June, Tesla made a loss of $1.33 (£1.01) per share. The company's net loss attributable to shareholders widened to $336.4m in the second quarter from $293.2m the previous year.

Revenue rose to $2.79bn from $1.27bn, which beat Thomson Reuters' estimate of $2.51bn, and investors were pleased the carmaker still had $3bn cash on hand at the end of the second quarter.

Read more: Elon Musk has shared some very snazzy snaps of the first mass market Tesla

Tesla said it expects positive non-GAAP Model 3 gross margins in the fourth quarter, eventually growing to 25 per cent in 2018.

"Several factors will influence our non-GAAP automotive gross margin for the rest of this year," the company said.

"Model 3 gross margin in the third quarter will be temporarily impacted by the excessive allocation of labour and overhead costs and depreciation over this tiny volume.

"As capacity utilisation improves, Model 3 non-GAAP gross margin is expected to be positive in the fourth quarter, and should improve rapidly in 2018 to our target of 25 per cent."

Read more: Elon Musk said Tesla's share price is too high

Tesla also expected Model S and Model X deliveries to increase in the second half of the year.

The company worked to calm analysts' concerns that it might struggle with production of its Model 3, restating that it is on track to hit previously announced targets.

The results came within a week of Tesla's long-awaited Model 3 launch, where Musk revealed that first off the production line would be a $44,000 version of the car with a 310-mile (500 km) range.

That is significantly higher than the $35,000 price most customers were anticipating, before incentives. That base model will begin production in January.

Read more: Tesla boss Elon Musk hands over first Model 3 electric cars

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