Tesla Motors accelerates production plans, brushes off Q1 loss
Electric car maker Tesla Motors Inc brushed off a big first-quarter loss and cheered investors with news that it plans to accelerate its production plans.
Tesla's loss rose 84 per cent to US$282 million in the first quarter as it struggled with parts delays for its new Model X SUV. The company's stock-based compensation costs also more than doubled during the quarter to nearly US$90 million.
The loss, of US$2.13 per share, far exceeded Wall Street's forecasts. Analysts polled by FactSet expected a loss of 87 cents per share.
But Tesla shares jumped in after-hours trading on Wednesday after the company said it is pushing ahead its plan to make 500,000 vehicles per year to 2018, two years earlier than scheduled. That's up from 50,000 vehicles in 2015.
Tesla said it remains on track to deliver 80,000 to 90,000 vehicles this year after resolving the Model X production issues. It also reaffirmed that production of the lower-cost Model 3 car will start in 2017. Tesla has set July 1, 2017 to start production of the Model 3 and wants to make 100,000 to 200,000 cars in the second half of the year.
Tesla CEO Elon Musk, who has a desk and a sleeping bag at the company's Fremont, California factory, said he celebrated the first flawless production of a Model X at 3 a.m. last Friday - eight months after the company started deliveries to customers.
He stressed that the Model X - with its gull-wing doors and free-standing rear seats - is much more complicated than the Model 3, so industry watchers shouldn't assume the company will have similar production problems. Tesla also will be tougher on suppliers who can't meet its deadlines, he said.
"No element of Model 3 can be approved unless manufacturing says it's easy to manufacture," Musk told analysts in a conference call on Wednesday evening.
Tesla unveiled the Model 3 on March 31. With a starting price of around US$35,000, it will be the most affordable car in the company's 13-year history. Tesla said more than 325,000 people put down a US$1,000 deposit to reserve the car in the first week after the unveiling. Musk said customers should order now if they want to receive their car in 2018.
Musk also called for manufacturing experts to join the company. The plea came as Tesla confirmed that its vice-presidents of manufacturing and production are both leaving the company.
"Tesla is going to be hell-bent on becoming the best manufacturer on earth," Musk said. "It's easy to get wrapped up in a bunch of short-term issues, but in terms of what matters for the future, I think that's the most critical thing."
Tesla delivered 14,810 Model S sedans and Model X SUVs in the January-March period. That was lower than expected, largely due to the Model X delays. But it was still a 48 per cent increase in deliveries over the same period a year ago.
First-quarter revenue rose 22 per cent to US$1.1 billion. The company said Model X prices - which start around US$80,000 - were about 30 per cent higher than for the Model S.
Tesla says unadjusted figures do not reflect its true performance because accounting rules limit how it records revenue for leases. On an adjusted basis, the company lost 57 cents per share, beating Wall Street's forecast for a 60 cent loss.