TESLA BEATS EARNINGS, SHORTS SQUEEZED              

By Todd Horwitz 

Tesla Soars

Tesla delivered a strong third-quarter earnings report after the bell on Wednesday, posting a surprise profit and telling shareholders it is ahead of schedule with a new factory in Shanghai. Shares spiked more than 20% after hours, putting them at their highest price since February.

The electric car maker gave investors plenty to look forward to next year. It released a glossy 28-page investor update filled with photos from its new factory in Shanghai where Tesla said it’s already begun trial production runs.

The company also said it was ahead of schedule on its long-awaited Model Y crossover, which it now expects to launch by next summer. At the same time, Tesla says it is planning to make a limited run of its Tesla Semi truck next year and hopes to soon announce the location of its European Gigafactory, where it aims to begin making electric vehicles in 2021.

We have moved the launch timeline from full 2020 to summer 2020,” Musk said. “There may be some room for improvement there, but we’re confident about summer 2020.”  That type of bravado is similar to Musk’s pronouncements about the production and delivery of the Model 3, which took much longer than expected and then ran into logistical concerns on deliveries that marred the first half of this year. The same happened with the U.S. Gigafactory, which has faced issues with ramping production and Tesla’s partner in the effort, Panasonicand left Tesla battery-constrained for a time while it was trying to make more Model 3s.

There is also the question of sustainability in general, given that tax credits for electric vehicles will be going away in the U.S. next year, and that the company already cut its costs to get to this point. Tesla cut 7% of its full-time work force earlier this year, closing most of its retail locations and cutting prices to help make up for the loss of tax credits. If Tesla runs into trouble during this ramp, it might have to hire up to fix the issues, again causing the same issues it has already suffered.

Todd “Bubba” Horwitz