Elon Musk: Tesla does not have a demand problem

Tesla Inc. Chief Executive Elon Musk took the stage at the company’s shareholder meeting Tuesday seeking to dispel concerns about demand and production that have plagued the Silicon Valley car maker for months.

Judging by Tesla’s TSLA, +1.98%  stock action in the extended session, Musk succeeded. The shares rose more than 3%, having traded around 1.5% higher as the meeting started at 2:30 p.m. Pacific, and after a 2% gain in the regular session.

“I want to make clear there’s not a demand problem. Sales have far exceeded production and production has been pretty good,” Musk said, adding that Model 3 sales have far outstripped the sales of its main competitors, both in units and in dollar amount.

The company has a “decent shot a record quarter” in terms of sales and production, and most of its orders are coming from new customers, Musk said.

Musk also spoke about the Model Y, Tesla’s next vehicle, the gigafactory under construction in China and a future one in Europe, and promised another Tesla acquisition to ease the company’s entry into insurance.

The Model Y compact SUV will reach volume production in late 2020, and likely garner more sales than Models 3, S, and X combined, Musk said. Tesla “internally is aiming” for that volume of production even sooner, he said.

Tesla is making “good progress” in building its gigafactory in Shanghai, and is already installing some machinery, Musk said. The company is actively searching for a site for a new factory in Europe, and expects to make a decision by the end of the year, he said.

“It makes sense to have a car factory at least on each continent,” Musk said.

Musk, who said in late April that Tesla was about a month from offering insurance, said that the car maker “has a small acquisition we need to complete” before launching that insurance product. It “won’t be long before we release that,” Musk said.

Musk has promised a “compelling” product, even though “Tesla Insurance” has been panned by some Wall Street analysts and observers as prominent as Warren Buffett.

Musk said a prototype of a Tesla pickup truck will likely be ready to be shown this summer, and again promised a pickup that will look like a vehicle “out of a sci-fi movie.” The Tesla Semi, a freight truck, is headed to production toward the end of the year, he said.

Musk also reiterated his promise to have a fleet of robotaxis on roads by the end of next year, although he added more qualifiers for its rollout, including the approval of regulators.

Tesla shares have lost 35% this year, contrasting with gains around 15% for the S&P 500 index SPX, -0.03%  and 12% for the Dow Jones Industrial Average DJIA, -0.05%  .

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