Tesla sells 5,500 Model S EVs in 3Q, will soon need 'giga-factory' battery plant

Every quarter, Tesla tells the world how many vehicles it has sold. While many other automakers share their details every month, Tesla remains wedded to the idea that it will only share data when the shareholders demand it. That's why, with today's third-quarter results, we learned that Tesla sold over 5,500 Model S EVs in the last three months. That's roughly 1,830 a month, and would put the Model S in the running for best-selling EV in America, except that Tesla's number is for global sales, and this last quarter is when the luxury EV became available in many new markets. In the second quarter, Tesla sold 5,150 cars, 90 percent of them with Supercharging capability.

Tesla has had to "stall" North American demand in order to keep European customers happy.

Shareholders are also rabidly interested in the future, and on a conference call with investors just now, Tesla CEO Elon Musk talked about increasing delivery to Europe, Asia and other parts of the world. In fact, Tesla has had to "stall" North American demand in order to keep European customers happy. As more and more people want a Tesla EV, Musk said, the main supply constraint will be the battery packs. The company recently signed an expanded battery supply deal with Panasonic but Musk did hint that Tesla may need to build its own battery plant at some point. Nothing official was announced, but Musk did say, when speaking about the upcoming, $35,000 Telsa (maybe called the Model E) that, "If we're to produce 500,000 vehicles a year from the former NUMMI plant, then we need cell capacity that is commensurate with that, which is maybe bigger than all the lithium ion production in the world today." He didn't say who would build it, but at some point, Musk said, "There's going to need to be some kind of giga-factory built."

"The key thing is to have the cheaper batteries in place for the third-generation vehicle" - Elon Musk

Speaking of that lower-cost EV, Musk said that it will be cheaper thanks to lower-cost batteries but there will also be other cost cutting measures implemented, hinting that the upcoming car won't be as nice inside as the Tesla's of today. "The key thing is to have the step-change [cheaper batteries] in place for the third-generation vehicle," he said, "but that would benefit the Model S and the premium line of cars as well."

On Tesla's deal with Daimler, the company says that the "development program" will be done in early 2014, after which the company will work on "start of production to support market launch by Daimler in 2014." Musk did say the B-Class EV would be a "great car" and called it the "most compelling affordable electric car on the market." On the topic of the two recent Model S fires, the shareholder letter doesn't address it direcatly, but it does speak about safety and say that, the "Model S has the lowest probability of injury of any car ever tested."

In the hours before the 3Q results were announced, TSLA stock was bouncing up and down from a high of $181.43 to a low of $171.36. In after-hours trading, the stock dropped like a rock, losing almost 11 percent as of this writing. By the time you read this, it'll certainly change again, as this is one volatile stock. As you go check that out, you can get the PDF here or look at the letter in our gallery and see the results of the last two quarters here and here.

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