Tesla expects more challenging 2014 as it sets higher sales goals

Article by Anita Panait, on February 26, 2014

Tesla Motors closed 2013, its first year as a full-fledged carmaker, posting $74 million in net losses on the back of $2 billion in revenue and 22,477 cars sold. Tesla is expecting a more challenging 2014 as it seeks to quicken production, add new offerings and expand globally. Tesla is seeing its cost structure increasing "significantly" as its r&d and production-line costs for the Model X crossover are starting to come online.

"We do need a new final assembly line, which we hope to transfer to in the third quarter or thereabouts," Tesla chief executive Elon Musk remarked last week during a conference call with analysts. "Also there's a new [body-in-white] assembly facility ... where the Model X is built."

He disclosed that they would have to build a separate line at its Fremont site in California when its smaller Gen III vehicle arrives in a few years.

According to Musk, a capital increase "would be a good idea" to finance construction of a plant to supply lithium ion batteries. "The car business is truly staggeringly big -- $2 trillion in new-car sales," Musk said, adding: "It's a pretty big ramp ahead in terms of reinvestment." In the fourth quarter of 2013, Tesla posted $16 million in net loss on $615 million of revenue.

Comparisons with figures in the fourth quarter of 2013 are difficult since Tesla had just started building cars in pilot volumes. As is its custom, Tesla posted a second set of results that don't conform to generally accepted accounting principles – showing $46 million in fourth-quarter profit. The measurements, however, get rid of certain expenses, lease accounting and employee stock-based compensation.

For the Model S, Tesla said that it comes with two motors, one in the front and the other in the rear. These two motors are able to control the amount of torque that goes to the front and the rear wheels in a digital manner and independently at that. Because of this, traction control is truly unmatched no matter the situation. When it comes to performance, the Model S can go from standstill to 60 mph in a matter of 2.8 seconds.

This means that the model could well be the quickest four-door sedan in history. Because the Model S has a rather low center of gravity, it is able to deliver superior handling. Making this possible is the battery pack being placed in the middle of the axles and along the floor pan.

Indeed, no other production model has a mass placement so ideal which results in the handling being optimized. Being an electric model, it means that one can drive the Model S without spending even a drop of gasoline. In terms of efficiency, the Model S has been rated by the EPA to have the equivalent of 90 mpg. Further, the brand’s very own Electric All Wheel Drive system increases both the traction and the efficiency.

In a number of standard all-wheel drive models, traction is generally increased at the expense of fuel efficiency. Another advantage of the Model S is that because there is no internal combustion engine, there is extra space for cargo.

The cabin also benefits in that there is now enough space to fit five adults and even two children, provided the latter are on the rear-facing jump seats. On the inside, one is likely to see a 17-inch touch screen display in the center that puts in a single intuitive interface the vehicle data, cabin control, communications, navigation, and even media. All of the functions are also echoed on the instrument pane. And to ensure that the driver remains focused on the road, there are also voice-activated.

Making the Model S even better is the over-the-air software updates that add functionality to Tesla models aside from enhancing the driving experience and delivering better performance.

These updates are like the ones you get on a smartphone, meaning that owners will be able to receive updates without the need to actually go to a service center. Further, said updates are free through the life of the Model S. Update version 7.0 for example included Autopilot capabilities. This is but an example of how the brand’s whole fleet is able to get an update and also give owners new and innovative features in a span of a few hours.

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Topics: tesla motors, sales



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