Lucy Nicholson / Reuters
- Tesla shares fell Wednesday after the company held its annual shareholder meeting the evening prior and CEO Elon Musk told investors that “there is not a demand problem.”
- Wall Street analysts have grappled with 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.
Tesla shares fell by nearly 3% early Wednesday after CEO Elon Musk addressed underlying vehicle demand at the company’s shareholder meeting the evening prior.
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.”
Tesla’s stock has plunged 35% this year, setting the name up for its worst annual performance since its 2010 initial public offering.
However, shares have seen a 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.
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.
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.”
Now read more markets coverage from Markets Insider and Business Insider: