Tesla Q3 stock update

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Tesla announced there Q3 2014 results on the 5th November 2014.

It was a mixed set of results but I listened to the Q&A with Elon Musk and Deepak Abuja the CFO. It was an interesting call.

We seem to be heading for some significant growth over 2013 with a slight fly in the ointment over the reconfiguration of the Tesla Factory for the production of the Model X. For prospective owners of the Model S or X the range of features available (for example colours and models) has been streamlined to reduce the manufacturing options which is a very smart move.

As a customer, I think that options are great, but there can be too many choices, especially around models and colours. I personally regret not going all out for the P85+ rather than the P85, but that is the benefit of hindsight.

I think Tesla doesn’t believe that demand is the problem, so why offer so many choices. Typically choice is something that you use to get the last 10-15% of customers rather than the 90%.

As a shareholder I am fairly confident that they are in a good place to achieve the growth they suggest. The margin they make as an automaker is much higher than the peer group and the high price point does say they don’t need to sell too many cars. In fact they reduced guidance from 35,000 cars this year to 33,000. This isn’t a seismic shift but a blip due to the issues of complexity of supply chain and reconfiguring the line (around 2-3 days production capacity lost in a project that was certainly more than 2-3 days to complete).

The stock is up around 50% this year, I expect the market to open up this morning and I am keeping hold for the long term and might even buy a little more.

As a customer, shareholder and watcher I couldn’t be more impressed with Tesla as a company.

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