Updated from 9:24 a.m. to include thoughts from Deutsche Bank analyst in the thirteenth paragraph.
NEW YORK (TheStreet) –– Tesla Motors (TSLA) is on track to do something few car companies have ever done: grow 50% a year for the foreseeable future. But it needs to get its production levels straight, first.
CEO Elon Musk said the company is poised to grow 50% in 2015, at least 50% in 2016 and for the foreseeable future, something that's almost unheard of. "We're growing our production by like 50% a year, year-over-year as far into the future as we can reasonably project," Musk said on the third quarter earnings call. "That's quite a big percentage growth for manufacturing a large, complex object. We would like to grow faster of course, but it's also worth bearing in mind we have got one factory."
Tesla continues to be supply constrained, though, for a different reason than in the past. For the full year, Tesla said it expects deliveries to be around 33,000 units, down from around its previous estimate of 35,000, due to "the complexity of launches related to dual motor and autopilot hardware. Consequently, we expect to deliver approximately 33,000 vehicles for 2014." Previously, Tesla had blamed the lack of lithium-ion cells for battery packs as a reason for not being able to fulfill demand.
The company did note that previous projections (of which it expects to have an annual run rate of 100,000 cars by the end of the year) for 2015 are unaffected.
It delivered 7,785 Model S units during the quarter, earning an adjusted 2 cents a share on $932 million in revenue. Analysts surveyed by Thomson Reuters expected the company to lose an adjusted 1 cent a share on $889.28 million in revenue.
For the fourth quarter, Palo Alto, Calif.-based Tesla said it expects to earn an adjusted 30 to 35 cents a share.
Musk harped on the issue that it's difficult to make hundreds and thousands of a product as complex as the Model S, given issues may crop up in one in 100 cars, but all 100 have to be checked.
"We also learned a lesson in manufacturing that you have issues that are sometimes one out of 100, but unless you make 100 of something, you don't see it," Musk said on the call. "Then you think the car is all good, but actually randomly one out of 100 is wrong, but you don't know necessarily which one out of the 100, then you've got to go look at all 100 cars."
Dougherty & Markets research analyst Andrea James believes the issues Tesla has faced are likely to help investors move on. "Tesla used the quarter to clear up a lot of noise around Q3 production and Q4 deliveries, and worries about Model X delays," James said in an email. "Now, we can move on."
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