Tesla stock has steadily declined over the past couple months, so Wednesday’s quarterly investor call was an important chance for Elon Musk and co. to reassure investors that what they’re doing will continue to make money.
And that they did. The demand for Teslas is growing, especially among those who live in luxury: In 2015, the Tesla Model S outsold all major large luxury vehicle competitors — the Mercedes S-Class, the Lexus LS, the BMW 6- and 7-Series, the Audi A7 and A8, and more — and did so by significant margins. It was also the only car among the group that could boast of an uptick in sales from 2014 to 2015, and, as Model S sales jumped from about 17,000 in 2014 to 25,000 in 2015, this was no small feat. The market, overall, dropped 1 percent; Tesla Model S climbed 51 percent.
Musk said Tesla has a hold on 25 percent of the premium sedan market, which entails there are “25,000 fewer gas guzzlers that are on the road.” This hold on the market is impressive, given that, as Musk explained, Tesla does not advertise, pay for endorsements, or discount cars for anyone. (Including Musk himself — “I pay full retail price.”) Also, they’re expecting positive net cash flow and profitability this year. At some point — though Musk was quick to say that there’d be no forecasting when it would occur — Tesla is expecting another period of exponential growth.
Not just all that, but, in Musk’s words: “Tesla is approximately doubling cumulative sales every year.” He continued: “I’m not sure if this has happened in the car industry for maybe a century.” At the start of 2015, there were 50,000 Teslas on the road, and at the end of the year that number jumped to 107,000. Tesla is projecting that doubling trend to continue in 2016, which, Musk said, is “pretty exciting and unusual.”
No doubt a large part of the change in the fourth quarter of 2015 was due to the release of the Tesla Autopilot feature in October, 2015, which is amazing and still learning. (Not that it necessarily needs to learn more, but, every time someone uses it, it does learn more. “Tesla Autopilot is learning at the rate of over a million real-world miles per day,” the quarterly report claims. And Musk himself claimed: “We just relentlessly make things better,” elaborating that, for the Model S there’s an average of 20 improvements per week.)
While these luxurious lifestyle upgrades have long been out of reach for us underlings, Tesla is releasing a more middle-of-the-road Model 3, which will be unveiled on March 31 and will run you about $35,000. Unlike all other Tesla models, the Model 3 will be designed for ease of manufacturing. In late 2017, it’ll be available for purchase. In the meantime, Musk said, all revenue from the Model S will go into Model 3 production.