Tesla loss widens as it ramps up expansion plan

Aug 01, 2014
Tesla Model S

US electric automaker Tesla Motors reported Thursday a widening loss in the past quarter amid record revenues as it ramped up plans for a giant battery plant for future vehicles.

The loss in the quarter ending June 30 was $61.9 million, compared with $30.5 million in the same period a year ago, while revenues jumped more than 90 percent to $769 million.

Tesla, which earlier in the day unveiled plans for its so-called "Gigafactory" with Japanese electronics giant Panasonic to produce , said its production plans are on track as it expands globally.

"We are adding new production capacity at our Fremont (California) factory that will allow us to meet the growing worldwide demand for our vehicles," said a letter to shareholders from chief executive Elon Musk and chief finance officer Deepak Ahuja.

"The speed at which we are executing this capacity upgrade will allow us to exceed 35,000 Model S deliveries this year. Provided that we execute well and there are no serious macroeconomic shocks, Tesla's annualized delivery rate should exceed 100,000 units by the end of next year."

While Tesla produces a relatively small number of vehicles, it has become a star in the sector due to keen demand and a reputation for high quality. A surge in its share price over the past year has pushed its value over $27 billion.

Tesla's Model S sells for around $75,000 but it is working on a less expensive Model X that is expected to garner wider appeal.

"We continue to open stores and service centers worldwide to support our global expansion," the letter said.

"For the rest of 2014, the rate of location openings will be fastest in China, followed by Europe, and then North America. We also continue to expand our supercharging network, with the introduction of our superchargers in Canada and a substantial increase in the rate of deployment in Europe and China."

Encouraging start in China

The letter said Tesla's Model S "is off to a very encouraging start in China, especially considering that we are delivering cars only in the areas around Beijing, Shanghai, Shenzhen and recently Hangzhou where we can assure customers of service coverage."

Tesla is planning to launch service and deliveries "in many additional cities in the upcoming months, including Chengdu and Guangzhou," it added.

Tesla said its right-hand drive Model S "is also being well received in the United Kingdom where it launched in June and in Hong Kong where it launched last week." Deliveries of this version are set to begin in Japan and Australia later this year.

Tesla said it opened a site in Nevada which could host the Gigafactory but that other locations were still being evaluated.

Tesla will run the operations while its Japanese partner will make battery cells destined for the plant and invest in equipment and machinery, according to a joint statement.

The companies did not disclose financial details, a location or other terms of the agreement.

Japanese media previously reported that Panasonic would invest as much as 30 billion yen ($290 million) in the multi-billion-dollar plant.

The pair said the large-scale plant should drive down the cost of batteries and eventually help popularize .

Explore further: Panasonic, Tesla to build big US battery plant

add to favorites email to friend print save as pdf

Related Stories

Panasonic, Tesla to build big US battery plant

Jul 31, 2014

(AP)—American electric car maker Tesla Motors Inc. is teaming up with Japanese electronics company Panasonic Corp. to build a battery manufacturing plant in the U.S. expected to create 6,500 jobs.

Tesla says decision on battery factory months away

Aug 01, 2014

(AP)—Electric car maker Tesla Motors said Thursday that it is preparing a site near Reno, Nevada, as a possible location for its new battery factory, but is still evaluating other sites.

The race is on to power the next generation of electric cars

Jul 16, 2014

A major shift from gasoline-powered to affordable electric vehicles feels tantalizingly close, but the battery technology that could make it happen still needs to catch up to its own hype. Although luxury-car maker Tesla ...

California back in running for Tesla battery plant

May 08, 2014

California is back in the running for a massive battery plant that electric car maker Tesla Motors plans to start building this year, but CEO Elon Musk said the state remains in the "improbable" category ...

Security contest techies say they hacked Tesla Model S

Jul 19, 2014

The good news: Tomorrow's cars are computers on wheels. The bad news: Tomorrow's cars are computers on wheels. Ma Jie, writing in Bloomberg News, reported this week that the Tesla Model S sedan was the target ...

Recommended for you

Taxi app Uber defies ban in Spain

3 hours ago

Smartphone car-ride service Uber vowed Friday to keep operating in Spain despite a ban following a lawsuit by taxi drivers and said it would fight the case in court.

Sony film mess reflects gadgets-entertainment gap

11 hours ago

Sony's iconic gadgetry and the star appeal of Hollywood may have appeared to be a perfect match when the electronics giant bought Columbia Pictures in 1989. A quarter century later, it's apparent that Sony ...

LivingSocial's new CEO eyes an experience-oriented future

Dec 24, 2014

Some big challenges lie ahead for LivingSocial, the online marketplace known for its daily deals and discounted prices on restaurants, spas and local activities. But that's where the company's new chief executive, Gautam ...

User comments : 5

Adjust slider to filter visible comments by rank

Display comments: newest first

ECOnservative
5 / 5 (2) Aug 01, 2014
Cash-flow killed other recent electric/hybrid vehicle makers like Fisker and Aptera - I hope Tesla makes it and gets to the point where they offer a car I can actually afford.
Eikka
5 / 5 (2) Aug 01, 2014
I hope Tesla makes it and gets to the point where they offer a car I can actually afford.


The main argument I get from EV afficionados is that if you just start selling electric cars, people will start buying them and the increase in demand will open up the market for mass-production for all the parts, including the batteries, and prices will naturally go down.

Well, look at Tesla: a car manufacturer just cannot make an electric car that people would buy _before_ they have access to cheap batteries. No demand, no market.

In reality, increase in demand will just mean increase in prices until competition catches up in volume - if they decide to risk expansion for just one company. Tesla is seeing costs go up - not down - the more cars they try to make, so they kinda have to start making their own batteries or they will fail.

Shootist
3 / 5 (2) Aug 01, 2014
tax payer funded through crony capitalism. car couldn't happen without carbon credits from CA, broke destitute thirsty, California.. it is a pity this is looked upon as sometime to admire
supamark23
1 / 5 (1) Aug 01, 2014
tax payer funded through crony capitalism. car couldn't happen without carbon credits from CA, broke destitute thirsty, California.. it is a pity this is looked upon as sometime to admire


You're a fucking moron.
shamsowow
not rated yet Aug 01, 2014
Most people rooting for Tesla forget how hard it is coming out with a battery thats cheap and has enough energy. its chemistry and its hard. The current lithium batteries took 15 years to develop. The hard part with batteries is how to get capacitor-like charging without blowing up the battery. Charge times for car batteries must be less than 10 minutes for Ev's to be viable to the masses and not just cult followers.

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.