Tesla delivered more electric cars in the second quarter than any three-month period in its history, alleviating concerns that demand is waning for its stylish vehicles as tax incentives in its main US market begin to phase out.Despite the heartening news Tuesday, Tesla still hasn't proven it can consistently make money despite repeated promises from CEO Elon Musk to reverse the company's long history of losses.
After finishing last year with a flourish, Tesla's sales engine sputtered to start this year. It had only 63,000 deliveries of its Model S, X and 3 vehicles during the first quarter, a 31 per cent drop from last year's fourth quarter that alarmed investors. That slowdown, coupled with ongoing losses that have raised worries about Tesla's financial health , is the main reason that Tesla's stock had plunged by more than 30 per cent so far this year.
That could be difficult, given Tesla buyers will be getting smaller tax credits than they had been previously. The US tax credit for electric cars stood at $US7500 , and then got cut half during the first half of this year. It is now shrinking again, to $US1875 through the rest of this year, before being eliminated entirely next year.
He also questions Tesla's ability to post sustained profits. "We continue to see risks with the company's growth story, which we believe is likely to be challenged as competition enters the market," he wrote. "Simply, we see a lot more that can go wrong than can go right."
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