More than 25,000 cars were delivered by Tesla in this year’s first quarter beating analysts’ estimates. This was a 69% increase year-on-year compared with a similar period one year ago. The record number of deliveries marks a strong beginning in a year in which the electric carmaker is expected to launch its mass market car, the Model 3.
Previously, Tesla has experienced repeated production delays. In 2016, for instance, the electric car maker missed vehicle delivery targets leading to questions over whether the company was serious about achieving its ambitions of production 500,000 cars next year. With the new record, the auto manufacturer now looks poised to reach its goal of producing between 47,000 and 50,000 cars in this year’s first half.
Model 3 production
It is expected that the coming months will be challenging for the company as the production of the Model 3 is expected to start in July. The Model 3’s asking price will be approximately $35,000 which is way cheaper that other Tesla models such as the crossover SUV and the Model S. Of the over 25, 000 cars that were delivered, 11,550 of them were the Model X SUVs while 13,450 were the Model S sedans.
Despite the record deliveries, analysts project the electric car maker will report losses when the first-quarter earnings are released next month. Losses of approximately $125 million are expected after adjustments have been made for one-off expenses. This is slightly higher as the fourth-quarter losses which were announced earlier in February were $121 million.
In that February earnings call, Elon Musk, the co-founder and chief executive officer of Tesla, disclosed that the Palo Alto, California-based firm needed to raise additional funds from investors with a view to shoring up the company’s balance sheet. Currently, Tesla is $8.6 billion in debt while it has cash reserves of $3.4 billion. Besides requiring funds for its upcoming production of Model 3, Tesla has also been investing heavily in a battery factory in the state of Nevada.
Recently, a Chinese technology company that is behind WeChat, Tencent, purchased a 5% stake in Tesla which is worth about $2.2 billion. This made Tencent Tesla’s fifth-largest shareholder.