Tesla Motors ends 2014 with a loss, after building 35,000 electric cars
CEO Elon Musk says new 2015 models and expansion of charging network will turn around results
Tesla Motors ended 2014 with an unexpected loss, but CEO Elon Musk says the electric car company is on track for record sales in 2015 as new models come on the market.
Musk was upbeat about the company's prospects, despite losing money both on the quarter and on the year. He even hinted at a new venture — new battery technology that could power your home.
The high U.S. dollar, production problems with its all-wheel drive Model S and some disappointing sales ate into Tesla’s results.
Especially disappointing was China, where Tesla has pinned some of its hopes for expansion, with China tapped to be second only to the U.S. in sales of electric vehicles.
Tesla sold just 120 cars last month in China, prompting Musk to fire two China executives.
High U.S. dollar hurts
The high U.S. dollar has made the Model S, already an expensive vehicle, even pricier in world markets. But Musk said he is holding his executives responsible where sales are lagging.
"We have no choice in this regard. There is no way that we can afford to subsidize a region of any size in the long term without causing serious harm to the company," Musk said in an email to employees.
In an earnings conference with analysts, Musk said he’s reluctant to raise prices of the Model S, which costs $71,000 in the U.S.
Tesla's fourth-quarter loss was $107.6 million, or 86 cents per share, compared to a loss of $16.3 million, or 13 cents per share, in the October-December period a year ago. Analysts had expected a small profit.
Tesla stock fell on the news.
Shipments of the all-wheel drive, dual-motor version of the Model S were delayed by production glitches and so weren’t reflected in fourth results.
The company built a total of 35,000 Model S cars in 2014.
For the full year, Tesla lost $294 million. Revenue jumped 60 per cent to $3.19 billion. Tesla, which was founded in 2003, has never posted a full-year profit.
Musk said the company is on track to turn around both its sales and its cash flow this year.
Tesla currently makes just one all-electric car, the Model S. Its Model X SUV is scheduled to go on sale this fall, while the Model 3, a $35,000 car, is expected to go on sale in 2017.
GM electric car coming
By then, GM could have a competing model electric car, based on the Chevrolet Bolt it showed at car shows last year. It announced today it plans to build an electric car with a 200-mile range and a price tag of $37,500 at a General Motors factory north of Detroit.
Tesla’s models should boost sales, but so should expansion of the network of charging stations in both the U.S. and China. It now has 900 charging stations in North America and Asia, with 380 having “Superchargers” which power the car more rapidly.
It has added maps and navigation to charging stations to its cars sold in China.
Musk has said Tesla plans to boost annual production from a projected 50,000 cars this year to 500,000 by 2020.
Meanwhile Tesla’s CEO has a new idea – a consumer battery pack that could power a home for a week, perhaps during a blackout.
He told analysts design of the battery is complete and it will be unveiled later this year.
With files from Associated Press, Reuters