Tesla, an increasingly popular electrical car company, has been in the news as of late. The company is the forerunner for green vehicles and its founder Elon Musk is also experimenting with space travel through his secondary company SpaceX.
On Friday, October 2nd, Tesla Inc reported that it had delivered 139,300 vehicles in the third quarter. This accomplishment marked the record for Tesla cars sold in a quarterly period. Despite this success, however, the shares of Tesla stock fell 5.7% in pre-market trading.
The decrease in confidence can be attributed to the company falling short on bullish estimates and forecasts. Estimates by Refinitiv expected the car company to sell 128,000 Model 3 and Model Y vehicles. Unfortunately for Tesla, however, they only sold 124,1000 units. Though this number is certainly not bad, it reflects the significance estimates play in the valuation of a company.
Tesla hopes to deliver half a million cars by the end of 2020 and at the pace they are currently operating at they will need to deliver more than 182,000 cars. This is an ambitious goal considering that thus far they have only delivered 318,000 vehicles.
Deliveries aside, Tesla is doing well in terms of production. Total production rose to 76% (145,036 vehicles) when compared to the previous three month period. The disturbance in production can be attributed to the coronavirus pandemic. The virus caused the car manufacturer’s California plant to cease manufacturing from late March through May.
Thanks to the easing of restrictions Tesla enjoyed a dramatic increase in its production and returned to pre-pandemic production levels. The push for an increase in production has been supported by Tesla’s new factory in Shanghai. The Chinese factory is the only plant operating outside of California.
Tesla is looking forward and hopes to open plants for battery and car manufacturing in Berlin, Germany. Moreover, they intend to expand their United States manufacturing by opening sites in Austin, Texas.
Tesla serves as the perfect example of how difficult mitigating the impacts of COVID-19 has been for businesses. Tesla was thriving prior to the pandemic and experienced a significant loss due to the virus. However, other companies can take note on what Tesla did to overcome this significant hurdle: they adapted and innovated. This is a key way to increase profits and exit rich.
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