Despite losing money last quarter, Tesla shares are still up after their earnings report. Why? Because the company is beating estimates on how many cars it will be able to produce this year.
Tesla expects to ship 80,000 to 90,00 Model S and Model X cars in 2016, beating forecasts that the company would only ship about 76,000 vehicles. The Elon Musk-led company expects to deliver 16,000 vehicles in the first quarter alone. Following the earnings report and strong projections, shares rose by as much as 10 percent in after-hours trading.
It’s important to note that Tesla’s forecast does not include one of the company’s most highly anticipated products: the $35,000 Tesla Model 3, which will be revealed on March 31. The car is expected to bring electric vehicles to the masses and will launch in 2017.
Experts were surprised by the strength of Tesla’s earnings report because many believed that lower gas prices—which are at their lowest levels since 2009— would cut into the demand for electric vehicles. That expectation was proven at least partially untrue by Tesla’s shipping forecast.