Shares of Tesla (NASDAQ: TSLA) have surged higher this week, helped by the electric-car maker‘s second-quarter report, which included better-than-expected adjusted earnings per share and an impressive outlook from management for a strong second half of the year. The upbeat update from management was welcomed warmly by investors as Wall Street is being greeted by a growing number of disappointing quarterly reports this earnings season.
While the earnings release included a lot of interesting information, investors interested in the stock should also take some time to listen to Tesla’s second-quarter earnings call, where management discussed its results in more detail with analysts. It was packed with helpful information, including additional commentary on the supply chain, more color on the company’s plans to boost manufacturing capacity, and more. Management’s comments from the call provided important information for investors as they try to assess the company’s growth potential.
Here are three quotes from the call that investors should see.
An improving supply chain
“I think we’re seeing a very rapid increase in battery production and in the whole supply chain,” said Tesla CEO Elon musk in the earnings call.
This is great news for Tesla, since the company seems to have more than enough demand. With Model Y orders today delivering sometime next year, for instance, Tesla’s sales growth is limited by supply.
The company provided some more concrete evidence of its improving supply chain when Elon noted that the company saw record levels of production at both its Fremont and Shanghai factories in June.
Combining its improving supply chain with its achievement of record production levels in June, Tesla said it expects to have a record-breaking second half of the year.
Tesla’s planned Cybertruck launch
The long-awaited Tesla Cybertruck has a target launch date. Musk said he expects deliveries of the fully electric pickup truck to start in the middle of next year. “And we’re very, very excited about that product. I think it might actually be our best product ever,” the CEO added.
Given the popularity of pickup trucks in the United States, investors have good reason to look forward to the important vehicle’s launch.
Manufacturing capacity expectations
In the company’s second-quarter earnings report, Tesla revealed it currently has installed production capacity for production of up to 1.9 million vehicles per year. For context, Tesla delivered only 936,000 vehicles this year. Achieving production levels of 2 million vehicles annually, therefore, would represent significant growth.
But it’s one thing to have installed capacity and another to refine production lines and the supply chain to fully utilize this capacity. To this end, one analyst asked how quickly Tesla can ramp up production and Musk said, “I think we’ve got a good chance of exiting this year at 40,000 vehicles a week.” That’s an annualized run rate of more than 2 million vehicles.
Overall, the earnings call gave even more credence to the already upbeat narrative revealed in the company’s second-quarter earnings report.
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Daniel Sparks has no position in any of the stocks mentioned. His clients may own shares of the companies mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.
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