Tesla Inc.’s Elon Musk sent a second email to employees in as many weeks painting a positive picture of demand for the company’s electric vehicles, after swirling doubt about the pace of deliveries sent shares tumbling.
“While our demand is strong, we have a lot of vehicle deliveries to catch up to in order to have a successful quarter,” the chief executive officer wrote to staff Wednesday. Musk said that starting Thursday, he’ll hold calls with teams in America, Asia and Europe every two days to “understand what’s needed to accelerate” Tesla’s rate of deliveries.
Tesla shares have plunged 43% this year, with the sell-off accelerating since the company reported deliveries of just 63,000 cars in the first quarter. Musk has struggled to overcome the impact of shrinking U.S. federal tax credits and analysts have voiced concern about the hit the company could take from the trade war with China, its second-largest market.
Tesla has said it expects to deliver 90,000 to 100,000 vehicles in the second quarter. On a call with investors last week, Morgan Stanley analyst Adam Jonas said the “whisper number” on Wall Street was for deliveries to reach the mid to upper 70,000-unit range.
Musk countered speculation about weak demand with an internal email last week, in which he wrote Tesla has a “good chance” of exceeding the 90,700 deliveries achieved in the last three months of 2018.
“Per my earlier email, if we execute well, Q2 will be an all-time record for Tesla vehicle deliveries and an awesome victory!!” Musk wrote Wednesday.
In April, Tesla reported an adjusted loss per share that was more than double the deficit analysts were estimating. While Musk, 47, forecast a loss for this quarter, he’s expecting a return to profitability in the following three months.
In the email Wednesday, the CEO said that fees to expedite shipments and routing inefficiencies led to higher-than-expected delivery costs in the first quarter. He said the company needed to address those costs to make it easier to break even.
A representative for Tesla didn’t respond to requests for comment on Musk’s email. The shares closed regular trading on Wednesday up 0.6% to $189.86.