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Tesla watchers got some, but not all, of what they were looking for on Wednesday.
In its fourth-quarter shareholder letter and conference call after market close, the Palo Alto, Calif., electric auto maker announced stronger than expected financial results and new details on its plan to steer around supply constraints that keep buyers on months-long wait lists.
But the company held off on unveiling the plans for its forthcoming massive battery plant, saying it will reveal additional information next week. One analyst speculated that it will likely be built in New Mexico, but it seems we’ll learn for sure soon enough.
One of the biggest challenges for Tesla has been production bottlenecks, driven by a shortage of the lithium-ion batteries that power its cars, and an underutilized plant in Fremont, Calif.
But the company announced it is likely to crank out 1,000 cars a week by the end of the year, up from about 600 currently.
At least two things will drive that improvement. Tesla struck a deal late last year with Panasonic that will provide it with some 1.8 billion lithium-ion cells over the next four years, effectively tripling its supply arrangement, noted Dougherty & Co. analyst Andrea James in a recent research report.
On top of that, CEO Elon Musk said on the call that the company is adding a second production line at its Fremont plant, exactly what some analysts had been hoping to hear.
“I think we’ll be able to ramp our production rate quite a bit with a fairly small increase in hiring,” Musk said. “Our labor efficiency is likely to improve a lot over the course of this year.”
Musk mostly batted away questions about the so called “giga factory,” saying the company would share more next week. But the shareholder letter said of the facility: “This will allow us to achieve a major reduction in the cost of our battery packs and accelerate the pace of battery innovation. Working in partnership with our suppliers, we plan to integrate precursor material, cell, module and pack production into one facility.”
The company said the factory will put it on track to deliver its long-planned affordable electric car within the next three years, while addressing the solar power industry’s need for battery packs. But for now it’s unclear where it will be, how much it will cost, how it will be paid for and when it will kick into production.
“The optimal arrangement would be for the partner to bring as much capital to the table as possible, while Tesla retains controlling interest,” James wrote.
Musk did say on the call that Panasonic will be the company’s primary partner, but added there would likely be other suppliers of precursor materials for the plant.
Excluding one-time items, Tesla posted fourth-quarter net income of $46 million, or 33 cents per share, on revenue of $761 million. Analysts were looking for earnings of 21 cents per share on $677 million in revenue, according to the average estimate from the Thomson Financial Network.
On a GAAP basis, Tesla lost $16 million, or 13 cents per share, on revenue of $615 million.
Investors applauded the fourth-quarter results, bidding up shares around 12 percent in after-hours trading. The stock closed at $193.64, but was trading around $217 as we hit publish.
This article originally appeared on Recode.net.
