Tesla (TSLA) Q2 2017 Earnings Call

Elon Reeve Musk – Tesla, Inc.

Model 3 is here with high production targets and zero promotion

 “…having with us steady production of Model 3s was an incredible milestone in the company’s history. We wanted to make a great, affordable electric car which is a fundamental thing that is missing. We wanted to make that from day one, and if we could only have done it sooner, we would have….I’m very confident that we will be able to reach a production rate of 10,000 vehicles per week towards the end of next year. And we remain – we believe on track to achieve a 5,000 unit week by the end of this year….what people should absolutely have zero concern about is that Tesla will achieve a 10,000 unit production week by the end of next year….We’re not promoting the car. If you go to our stores, we don’t even want to talk about it, really, because we want to talk about the thing that we can supply. If somebody orders a Model 3 now, it’s probably late next-year before they get it.”

The demand for Model 3 is pretty high

“there have been 518,000 gross reservations for 3, and 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.”

Demand for Model S and Model X unaffected by Model 3 release

“It should also be noted that one of our big concerns was that Model S, particularly, and Model X demand would suffer with the introduction of the Model 3. In fact, this has turned out to be the opposite situation. Model S and Model X demand increased with the release of Model 3.”

Learning to be less dumb

“When we make mistakes is because we’re stupid, not because we’re trying to mislead anyone. I just want to emphasize – I – we aspire to be less dumb over time. “

There may be more gigafactories coming

“we’re also thinking hard about, where do we put Gigafactorys three, four, five and six? We expect to keep the majority of our production in the U.S., but it’s, obviously, going to make sense to establish a Gigafactory in China and Europe to serve the markets there, because it’s not to build cars (29:23) in California and truck them halfway around the world, particularly when you’re trying to make things as affordable as possible – that really hurts.”