Tesla continues to burn through cash at a bonfire rate, and doubts remain that CEO Elon Musk can deliver his new mainstream electric Model 3 at the pace he is promising. But Tesla's share price shot up by 3.8% in after-hours trading when it announced sharply higher-than-expected quarterly earnings, and Musk delivered a decidedly ebullient assessment of the company's prospects.
"This is the best I've ever felt about Tesla," Musk told Wall Street analysts in a second-quarter earnings call.
The $35,000 Model 3 is important both to Tesla and the market. If it succeeds in capturing large, year-after-year sales, Musk's big bet on creating a new carmaker will be a stunning success; conversely, if sales are only middling or peter out, Tesla will probably fail — there does not appear to be a Plan B. As to the market, the Model 3 has driven almost every major carmaker on the planet to plan their own electrics.
One thing raising Musk's spirits is the public reception for the Model 3. He said a telling measure is what journalists said after going for a spin at its July 28 coming-out ceremony: "Eighty percent of the journalists said they would buy the cars themselves. The other 20% said 'maybe.' This is crazy. I've never seen anything like it."