In the third quarter, Tesla Motors Inc. posted a net loss of $34.9 million, which is wider than last year’s $4.6 million loss. This is being attributed to higher engineering costs.
Tesla spent $26.7 million in the third quarter for research and development compared to $15.4 million in the second quarter. Nonetheless, the electric carmaker remains upbeat that the development of its new Model S sedan was on schedule.
Revenue has dropped by 31.4 percent to $31.2 million. Tesla anticipates that it will post losses until at least 2012, which is when it will launch the Model S.
It should be mentioned that in the third quarter of 2009, Tesla had only spent $1.3 million on R&D. The reason for the sharp increase in R&D costs is because Tesla is aiming to complete development work on the Model S sedan in time for its planned 2012 launch date.
Tesla is targeting to complete a working prototype of the sedan, which is priced at about $57,400, by the end of the year.
In a conference call, Tesla CEO Elon Musk said that the near term quarterly profitability is “not a particularly meaningful goal” since it aims to spend half a billion dollars over the next nine quarters.
He said that the significant rise in expenses is expected since Tesla will go from producing about 600 units a year to about 20,000 units annually.