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.

Topics: tesla motors, sales

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