In classic Tesla fashion, there was both good news and bad news out of the electric carmaker today, because nothing can ever be simple with them. The good news is the company set records for production (87,048 vehicles) and deliveries (95,200) in the second quarter, rebounding nicely from the abysmal first quarter of the year, when the company delivered just 63,000 cars.
Now for the bad news: Two executives are not sticking around to find out where the Tesla story goes from here. Bloomberg reports Jan Oehmicke, the head of Tesla’s European operations, is out, and Business Insider says Steve MacManus, vice president of interior and exterior engineering, also left the company. Losing executives is nothing new for Tesla, having faced a mass exodus of higher-ups last year that were largely replaced from within.
But even the delivery stats, while obviously good news, also has warning signs. 83 percent of the company’s production in Q2 were Model 3s. This only exacerbates investor fears that Tesla may be cannibalizing its own higher-priced Model X and Model S sales with the cheaper and newer Model 3. So while the company is selling more cars, it may not be making as much money per unit.
This was the theory put forward by Bloomberg’s Dana Hull, who says Wall Street is also concerned about this:
The potential cannibalization of higher-end Model S and Model X sales by the cheaper Model 3 gives Wall Street pause. Analysts keep cutting their price targets for Tesla’s stock, and even after a 21% rally in June, the shares are down 31% for the year.
Such is Tesla’s lot: even when they set a company record for production and deliveries, there’s still plenty of reasons to come out of it feeling like Tesla’s in a rough spot. That’s why experts warn against over-promising.