Tesla CEO Elon Musk says company 'past the point of high risk' despite larger losses
PALO ALTO, Nov 05, 2012 (Menafn - San Jose Mercury News - McClatchy-Tribune Information Services via COMTEX) --Tesla Motors (TSLA) posted a wider quarterly loss Monday as the car company ramps up production of the all-electric Model S sedan. However, the company assured Wall Street that it remains on track to deliver 2,500 to 3,000 vehicles in the fourth quarter and maintained its 2012 revenue outlook of between 400 and 440 million.
Tesla posted a third-quarter loss of 110.8 million, or 1.05 a share, compared with a loss of 105.6 million and 1 a share in the second quarter.
Tesla says it has successfully made the transition to a mass-production car company. In September, the company was making about 100 cars a week. In October, it began making 200 cars a week and says production at the Fremont factory will be running at 400 cars a week a month from now.
"Overall, Tesla is past the point of high risk," said CEO Elon Musk in an early-morning conference call with analysts. "I feel as though we're through the valley of death."
Tesla says it remains on track to produce at least 20,000 units in 2013.
When asked how many cars are coming "clean" off the production line, Musk said that most vehicles require some additional work to correct minor aesthetic issues.
"There's been a rapid decline in the number of
issues that need to be corrected," said Musk, a notorious perfectionist. "It's getting better very quickly."
The company says 13,200 customers have put down reservations for the Model S, up from 11,500 at the end of the second quarter. But 10 to 15 percent of reservation holders cancel their reservations before locking in options like trim color.
In September, hours after unveiling plans for a nationwide network of "Superchargers," Tesla quietly cut its revenue forecast for 2012 and admitted that production of its all-electric Model S sedan is "slower than we had earlier anticipated." The company had previously vowed to make 5,000 cars by the end of this year.
In the third quarter, Tesla produced almost 350 vehicles and delivered more than 250 Model S sedans to customers.
Tesla was awarded a 465 million federal loan through the Energy Department's Advanced Technology Vehicles Manufacturing Program in 2009, and was able to draw down the entire amount as it met a series of milestones. Tesla started paying interest on the loan in 2010 and will begin repaying principal Dec. 15.
Tesla is also touting the rollout of what will become a nationwide network of high-speed "Superchargers" for the Model S. The goal is to allow Model S drivers to be able to quickly charge their vehicles at no charge while on long drives.
Musk recently drove from Los Angeles to San Francisco with all five of his children and said there were no hitches.
Contact Dana Hull at 408-920-2706. Follow her at Twitter.com/danahull.
Tesla model s
Tesla Motors originally planned to make 5,000 Model S luxury sedans by the end of 2012. In September, it revised those figures downward. Here are its latest numbers and projections for the Model S.
Cars built in the third quarter: 350
Cars delivered to customers in the third quarter: 250
Cars it expects to deliver in the fourth quarter: 2,500 to 3,000
Cars it expects to deliver in 2013: over 20,000
Source: Tesla Motors
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