Elon Musk addressed the Tesla problem Wall Street is obsessing over, and the stock is jumping
Lucy Nicholson / Reuters
Lucy Nicholson / Reuters
- Tesla shares jumped almost 4% early Wednesday after the company held its annual shareholder meeting the evening prior and CEO Elon Musk told investors "there is not a demand problem."
- Wall Street analysts have grappled Tesla demand issues for months, and shares have slumped 35% this year.
- Musk, who has in the past made promises that have not panned out, also said it "won't be long before we have a 400-mile range car."
- Watch Tesla trade live.
Elon Musk just told investors exactly what they wanted to hear.Tesla shares rallied early Wednesday after the company's chief executive, at the company's annual shareholder meeting, addressed underlying vehicle demand the evening prior.Advertisement
Demand is a core theme that analysts have for months said is a major issue for the automaker, leading firms up and down Wall Street to cut their earnings estimates, price targets, and investment ratings.
"I wanted to clear, there is not a demand problem, okay? Absolutely none," Musk said, according to a Thomson Reuters transcript."The - sales have far exceeded production, and production's been pretty good. So we're actually doing well. We have a decent shot at a record quarter on every level. If not, it's going to be very close, but we've got a shot at a record quarter. And 90% of orders are coming from nonreservation holders, so these are new customers."
resurgence in the last week, rallying 23% since touching a 2 1/2-year low earlier this month. The upside comes as analysts in recent weeks have grown increasingly optimistic - a departure from sentiment that hit rock bottom. Advertisement
Musk, who has in the past made promises about the company that have not fully panned out, also said during the meeting it "won't be long before we have a 400-mile range car." As it stands, the longest-range Model S that Tesla offers can achieve 370 miles when fully charged.
He also declared that Tesla might make a move into mining. "We might get into the mining business. I don't know," Musk said.Read more: Elon Musk just said Tesla might get into the mining business to make sure it can make enough batteries for future vehiclesAdvertisement
Some analysts applauded Musk for his executive-like posture and for speaking about demand.
"Musk was calm, confident, and articulate in a way that we haven't seen in his last several public appearances," Gene Munster, a longtime analyst and managing partner at Loup Ventures, wrote in a note following the meeting. "He was less combative and more measured in his remarks about Tesla's roadmap, even admitting, 'I'm often too optimistic about time frames.'""In the past, when Tesla has been struggling, Musk has been visibly troubled himself, and we didn't see that today," Munster said, adding that while demand commentary was encouraging, "investors will continue their wait and see posture." Advertisement
Now read more markets coverage from Markets Insider and Business Insider:A full-blown recession and double-digit stock losses: Morgan Stanley just unveiled its revised bear case for the trade war - and it's not prettyAdvertisement
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