Tesla Conference Call Highlights

Tesla Motors Inc TSLA reported its third quarter earnings on Wednesday. Shares of the company are up 5 percent.

Below are some key questions and highlights that took place during its conference call.

I'm wondering if you can give us any additional color on how you've gotten confident in 50,000 Model S deliveries in 2015.

• I don't think 50,000 is going to be super hard, because if you look at sort of how we're exiting the year in production and demand.

Can you give us any kind of hard numbers on what you've seen in terms of order flow either geographically?

• If you sort of just extrapolated the demand since the announcement, it would be like 70,000 cars a year, but that's not the - in terms of - that's in terms of demand, but I think that would probably be unwise to state that as a steady state prediction, so we were like more conservative around 50,000, and - but it's 50,000 with high confidence.

The leasing program with your partners, is it too early to get any sense of kind of how that's being received by the consumers.

• I really tried to emphasize it is not a question of demand. So, because that sort of 70,000 order number, that's net orders, net of cancellations, that's with no advertising, no endorsements, so we don't pay anyone to pretend that they like our product. If you see our car in a movie, it's - we didn't pay for it to be there, it's just there.
• We're growing our production by like 50% a year - year-over-year is part of future as we can reasonably project. That's quite a big percentage growth for manufacturing a large complex object.

I mean would you consider providing more information to the analysts and investor community in the form of monthly sales data for one, maybe showing the backlog again for two and also maybe reinstating.

• I mean, it really took pains to emphasize demand is not our issue. Production is our issue and being too perfectionist about future products.
• It really needs to parse into orders and deliveries. And then bear in mind, there are lots of things we can do to amplify orders. So, it's not - orders is not a true measure of demand. It is just a measure of - that's the amount of stuff we need to do to meet our production and delivery number.
• Then so if we released orders, people will try to read the tea leaves and say, oh, demand for Tesla is growing or dropping.

It comes further down as we start to procure cells at that lower yen and then that goes into vehicles a few months later.

• We're delivering cars in Europe, North America, and Asia,and we obviously just started delivering cars to Japan. So, that does provide a natural hedge.
• So that's why we feel confident in predicting a 50% growth in orders and deliveries that - fairly comfortable next year and then at least a 50% growth in 2016 again and in subsequent years too

I mean the Chinese government clearly also are very interested in supporting the development of electric vehicles, particularly the development of electric vehicles domestically. Has the government approached you too with respect to how you might be able to help some of the domestic players?

• They've actually been quite supportive. One of the things we're working through right now is just getting on the electric vehicle list, which is a bunch of requirements on it that we're working with the Chinese government to try to get on that list.

Any color on the warranty accrual of $14 million, how many vehicles is that across?

• So, we're about 30,000, I'm giving you round numbers here, of cars delivered prior to Q3. And the going-forward run rate for warranty accrual is slightly lower than what we did as a one-time.