Tesla Motors Inc (NASDAQ: TSLA) shares fall sharp as investors react to the second quarter earnings report released yesterday after market close. The report has revealed several challenges the company has to face with, including the most important number from the point of view of investors – total projected vehicle deliveries. Investors were looking forward for Tesla’s CEO Elon Musk to confirm the previous projection of delivering 55,000 vehicles this year. Yesterday the company changed their projection to a range of 50,000 to 55,000 cars deliveries in 2015, down from an initial target. The stock fell in value by about 10%.
A rather unexpected issue Elon Musk has revealed is regarding the highly anticipated SUV Model X. There are issues with seats and other interior design pieces. Musk explained, “Our biggest challenges are with the second-row seat… It’s an amazing seat, a sculptural work of art, but a very tricky thing to get right.”
Despite the lower projections for this year, Musk remains confident long term about the success of Tesla. The company is expected to produce about half a million cars by 2020. As for the company’s rising popularity, Musk pointed out that Tesla was producing only 600 cars a year five years ago, now it produces 600 cars in three days.
As for the earnings, Tesla’s adjusted loss reported for the quarter was 48 cents a share ($61 million) slightly less than Wall Street’s estimates. The company also reported revenue of $1.2 billion, more than $1.19 billion analysts have predict.