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Tesla shares plummet after second quarter results

Tesla’s stock price has been gradually gaining speed since April, but finally hit a bump with the second quarter earnings results. Even though the numbers were solid, investors are not happy with the company’s reduced full vehicle delivery outlook.

The share price dropped by 8.88 per cent following the second quarter results.

The shipping numbers were changed from 55,000 solid deliveries in 2015 to between 50,000 and 55,000. That still means Tesla can deliver on its previous promise, but does not have the confidence it did back in the first quarter.

Tesla managed to ship 11,000 vehicles in the second quarter, but with the Model X launching on September 30th, the vehicle deliveries are expected to double by the end of the 2016 fiscal year. The Model X will cost around the same as the Model S, but it is built for families rather than a single person.

Oddly enough, numbers for Tesla Energy’s Powerwall sales did not do much to interest investors. Musk said in the investor’s call that over $1 billion (£640 million) in reservations have been made for the battery pack. Earlier this year, when Tesla originally revealed the sales numbers, the stock spiked by over five per cent on the news.

Tesla managed £770 million in revenue over the second quarter, but with the mass expansion of the Model X, it did not reach profitability. The company also noted £1 billion in financial expenditures, stemming from work on the Gigafactory.

All in all, even though the numbers are down, Tesla continues to show promise with the Powerwall and Powerpack. If it can reach a state in 2016 where the Model S and X aren’t on constant backorder, we may see a large spike in the number of deliveries.

Most of Tesla’s projections seem to be centered on 2017, with Musk stating a few billion dollars in the energy market and hundreds of thousands of electric car sales by then. The Model 3 is also intended to launch in 2017, meaning this may be the year Tesla wants to be cash flow positive and without a huge back order on products.