Tesla Motors Inc. posted $61.9 million in net loss in the second quarter of 2014, more than doubled the $30.4 million loss it logged in the same period in 2013. The larger loss comes despite Tesla producing and selling record numbers of Model S and logging almost a 90-percent increase in revenue to $769.3 million.
Tesla built 8,763 Model S units and delivered 7,579 of them around the world in the second quarter of the year, and was even “unable to keep pace with increased demand” in North America and Europe.
Tesla said its losses were attributable to r&d expenses that more than doubled to $107.7 million as the carmaker ramp up engineering work on the upcoming Model X crossover bound for production next spring. According to Tesla, operational “alpha” prototypes of the crossover could be ready next week for production design validation.
It added that functional “beta” prototypes on the road could be ready for late-stage testing by the first quarter of 2015. During a conference call with analysts, Tesla chief executive Elon Musk remarked that the carmaker is working on more than just the Model X.
He noted that Tesla’s capital expenditures and r&d figures are better than they appear since it is working on stuff people “don’t know about.” According to Musk, demand for the Model X is already strong, but Tesla is “anti-selling it,” which means the carmaker is withholding details on performance, features and on-sale date from interested buyers so as to support Model S sales.
To cater to the growing demand for the Model S and to get ready for the Model X, Tesla will increase production capacity at its Fremont assembly site in California.
It will install a new final assembly line and additional automation in the body shop – allowing Tesla to hike its weekly output to 1,000 vehicles starting in the fourth quarter and it annual production to 100,000 cars by the end of 2015.
Earlier this year, Tesla acknowledged that 2014 would be challenging year for the carmaker. In 2013, Tesla sold 22,477 cars, earned $2 billion in revenues and posted $74 million in net losses. In the fourth quarter of 2013, Tesla posted $16 million in net loss on back of $615 million in revenues. The carmaker had first year as a full-fledged carmaker in 2013.
Tesla is seeing a more challenging 2014 as the carmaker looks to hasten production while adding new products and expanding globally. Musk has remarked that Tesla would need to build a separate line at its Fremont, California site when its smaller Gen III vehicle arrives in the next few years.