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Elon Musk says Tesla has 'a decent shot' at a new production record

Javier E. David
Editor focused on markets and the economy
Tesla CEO Elon Musk speaks during the unveiling of the new Tesla Model Y in Hawthorne, California on March 14, 2019. (Photo by Frederic J. BROWN / AFP) (Photo credit should read FREDERIC J. BROWN/AFP/Getty Images)

Tesla (TSLA) CEO Elon Musk told shareholders on Tuesday that the electric car maker had a “decent shot” at setting a new production record, following a first quarter that disappointed markets and sent its stock reeling.

In a presentation, Musk touted the performance and sales of its flagship electric vehicle, the Model 3—touting the car’s outperformance against its counterparts and citing BMW, Audi and Lexus by name.

In April, Tesla accounted for 32% of all EVs sold in the U.S., far outpacing those sold by General Motors (GM), Ford (F), Audi and Toyota (TM), the parent company of the Lexus.

“Sales have far exceeded production,” Musk said, which he described as “pretty good,” and “outselling all competitors combined in the U.S.”

He also teased coming attractions such as self-driving cars, a pick-up truck and even a possible “submarine” show car styled in the image of a James Bond vehicle.

Appearing to confirm reports that Tesla was churning out cars at a near-record pace, Musk added: “We have a decent shot at a record quarter at every level...and 90% of orders coming from...new customers.”

In the final months of 2018, Tesla set a production record of over 90,000 vehicles. Musk extolled Tesla’s growing emphasis on its self-driving capabilities. He boasted that “it won’t be long” before the electric car maker would have a vehicle that could travel 400 miles.

He predicted that Tesla drivers should be able to access autonomous features — without intervention— by next year.

“Clearly we’re headed toward electrification, and clearly we’re headed toward autonomy, and this is the kind of car people want to get,” Musk said.

Coming soon: Pickups and submarines?

Despite mounting financial pressure and cash burn, the car maker recently unveiled plans for a new Model Y sport utility vehicle (SUV), which it will begin manufacturing next year.

“We think demand for the Model Y will be greater than Model S and Model 3 combined,” the CEO told shareholders on Tuesday.

He added that a Tesla pick-up truck could be unveiled as soon as this summer — and half-joked about creating an “aquatic” vehicle in response to a shareholder’s question, perhaps as a “show car” of sorts. Several years ago, Musk actually purchased the iconic Lotus Esprit featured in the 007 movie, “The Spy Who Loved Me.”

Referencing a plan for Tesla to offer insurance to its drivers, Musk — who first floated the idea in April during the company’s quarterly call with investors and analysts — dropped a couple of intriguing hints. He said the plan was still in the works, but required “a small acquisition” and “writing of software.”

Tesla’s first quarter report was widely perceived as disastrous by Wall Street analysts. During the first 3 months of 2019, the company burned through more than $1 billion and missed production targets in the midst of waning demand.

Meanwhile, a revolving door of executives and board members have raised questions about Tesla’s governance, and the company’s ability to manage its outspoken yet erratic superstar CEO.

Musk has been waging a verbal assault on both the Securities and Exchange Commission and bearish investors betting against Tesla’s stock. Last year, the billionaire landed in hot water after posting on Twitter that he was considering taking Tesla private, and that “funding [was] secured.”

After tumbling to a new 52-week low at $176.99, Tesla’s stock has been on an upswing, amid reports the company is poised to set a new production record for the current quarter.

It closed Tuesday’s trading session above $217, up more than 4% on the day, adding an additional 3.5% in after-hours trading.

Morgan Stanley, which has .a price target of $230 on Tesla’s stock, said the company’s autonomous driving efforts are being undervalued by the market.

“While we acknowledge the higher degree of urgency needed for traditional industrial companies to form separate ‘tech-centric units’ to attract and retain talent vs a company like [Tesla]...we believe there are potential advantages to considering the value encapsulated within Tesla in the form of hardware, software and access to substantial amounts of driving data/miles,” the firm’s analysts noted.

Javier is an editor for Yahoo Finance. Follow Javier on Twitter: @TeflonGeek

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