Photo: AP

Analysts expected that Tesla would lose in the neighborhood of 69 cents per share in the first quarter, but Tesla’s real numbers, released today, were much, much worse than that. Tesla lost $2.90 a share, or $702.1 million in the quarter, according to CNBC, almost as much as they lost in the same quarter last year, mostly because of falling demand. Things still aren’t looking up.

The falling demand, much more than the financial loss, is what will worry Tesla the most. That’s because Tesla always positioned the Model 3 to be the mass-market car that would drive profit at the company. But the $7,500 federal tax credit for Tesla started phasing out on January 1, and while the company still sold 63,000 cars this quarter, that was also below analysts’ expectations.

There was some sign that this might be coming last month, when Tesla announced a plan to close its dealerships, lay off a bunch of workers, and shift sales online. That plan was rolled back almost as swiftly as it was announced, but it was evidence of some underlying distress. Tesla has also begun placing more of its bets overseas, and is building a new factory in China, all moves that suggest that Tesla knows that the American market might be close to getting tapped out.

You won’t hear any of that, of course, from Tesla. No, its ambitions are as big as ever.

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That’s a bit hard to read but Tesla says there that that if, if, Tesla can get its new Shanghai factory online this year it could produce over 500,000 cars in the one-year period ending June 30, 2020. That would be around 150,000 more than the company made in all of 2018. The question going forward is if anyone wants them.

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Europe and China may answer that question pretty soon, but until the Shanghai plant is up and running Tesla’s currently shipping cars to different places all over the world, which CEO Elon Musk on a conference call called “the most difficult logistics problem I’ve ever seen.”

Musk also said that oh, by the way, Tesla will be launching an insurance product. It’ll come out in about a month.

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From CNBC:

“The answer is yes we are creating a Tesla insurance product and we hope to launch that in about a month. It will be much more compelling than anything else out there,” he said.

In response to a subsequent question about the safety of Autopilot, Musk said Tesla gives more details about safety to insurance companies.

“We do give some more detailed information to insurance companies to help with rates. And obviously as we launch our own insurance product next month, we will certainly incorporate that information into the insurance rates,” Musk said.

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Tesla’s cars are so special that they need special Tesla insurance now, it would seem. The only surprising thing, I guess, is that this hasn’t existed all along, given Musk’s preference to do almost everything in house. And sure, Musk can say that it’ll be super compelling but in the end the market will decide, as it seems it already is in some respects with Tesla’s cars.

I’ve emailed Tesla for additional comment and will update this post if I hear back.