SAN FRANCISCO - Tesla on Wednesday said it was speeding the timeline for building half a million cars as it steps up production to meet growing demand for its electic vehicles.
Tesla Model S cars at a showroom in Shanghai
Hot demand for a new, more affordable Model 3 led the company to shave two years off its timeline for building a combined total of 500,000 vehicles, combining Model S, Model X, and Model 3, and make the new target date 2018.
"Increasing production five fold over the next two years will be challenging and will likely require some additional capital, but this is our goal and we will be working hard to achieve it," Tesla founder and chief executive Elon Musk said in a letter released with a quarterly earnings report.
Musk affirmed the company's plan to deliver 80,000 to 90,000 new vehicles this year, and said it was on track to begin deliveries of its keenly awaited Model 3 late next year, which at around $35,000 will be priced at about half the cost of its Model S.
Tesla received more than 325,000 orders for its Model 3 during the first week it began taking deposits, despite never paying for advertising or endorsements, according to the company.
"This implies about $14 billion in future sales, making the Model 3 introduction the biggest consumer product launch ever," Musk said.
"Since then, reservations have continued to grow to surpass even our expectations."
In its quarterly results, Tesla said revenue in the past quarter climbed to $1.6 billion in a 45 percent increase from the same period a year earlier, while the company's net loss narrowed 34 percent to $75 million.
"Our financial performance improved as well," Musk said in the letter.
Tesla shares climbed 3.8 percent to $231 in after-market trades that followed release of the earnings report, regaining ground lost during the day after word spread that it was losing two key executives.
- Executives hitting the road -
One of the departing executives was Tesla vice president of production Greg Reichow, who was reported to be in the top pay ranks at the company.
After being with Tesla for more than five years and leading its production team for the past three, Reichow plans a leave of absence to "have a well-earned break," a Tesla spokesman said in response to an AFP inquiry.
Reichow will remain at Tesla until someone if found to replace him, according to the company.
"Greg and the team deserve a lot of credit for building an all-new manufacturing organization from the ground up and for making Model S and Model X a reality," Musk said.
"We're confident that with the strength of the team, high-quality manufacturing at Tesla will continue."
In a release statement, Reichow described the Tesla team as talented and committed, and that he strongly believes in the company's "ability to successfully deliver great cars and inspire the world to drive electric."
Tesla offered no comment on reports on the departure of another executive, Josh Ensign, who had been vice president of manufacturing.
Consumer Reports last month recounted a series of glitches with its new Model X electric sport utility vehicle, sending Tesla shares skidding.
Among the snafus cited: problems with the vehicle's "falcon wing" doors either not opening or not shutting; difficulties with the car's self-driving mechanism becoming "confused"; "double vision" distortions from the curved windshield; and insufficient heating.
Consumer Reports praised the California company's consumer service, but questioned "whether Tesla can keep up with the service issues" as output increases.
Tesla said the Model X's reliability trends are comparable with those on the Model S sedan, which has improved considerably over the last two years, and that it was working quickly to address any problems.
On April 11, Tesla announced the recall of 2,700 Model X vehicles to fix a locking hinge that could allow third-row seat backs to fold forward unintentionally.