Tesla reports earnings and boosts production
Tesla Motors is promising a big boost in production of its electric cars, encouraging analysts to remain bullish on the Silicon Valley electric car company.
In a second-quarter earnings announcement, Tesla said it would meet earlier projections of producing 35,000 of its high-end battery-powered cars this year -- and increase production to 100,000 next year.
Tesla said it had revenue of $769 million for the quarter, using generally accepted accounting principles, including $23 million from sales of power-train components to Mercedes-Benz and Toyota, who both are using Tesla parts to build electric cars.
Income for the quarter showed a loss of $62 million, or 50 cents a share.
The company said it would increase investment by $750 million to $950 million in 2015, up from earlier estimates.
The company’s plans for more production capacity rest largely on a planned battery factory. Tesla confirmed it had broken ground on the factory at a location near Reno, Nev., but that other sites in several states remain in the running.
It will be a manufacturing site for the lithium-ion batteries that power Tesla’s Model S and its upcoming SUV model, the X, due out early next year. The Model S starts at $71,000 and can run upwards of $100,000 with options.
The company has some time to figure out how to boost manufacturing, said Thilo Koslowski, senior automotive analyst for the firm Gartner.
“Tesla is the only game in town for electric vehicles in this class and with this kind of range,” he said. “They are not going to face any kind of competition anytime soon.”
Shareholders had been told to expect a production slowdown during the summer, as the company’s factory would go offline temporarily to prepare for production of new models. But Tesla assured it would meet the projection of 35,000 cars for the year.
Analysts had also been looking for new information about the company’s activities in China and the United Kingdom, where Tesla has recently begun selling its electric automobiles.
The manufacturer had earlier in the day announced a new formal partnership with Japanese electronics giant Panasonic Corp.
Under the new agreement, the two companies will join forces on Tesla’s planned $5-billion battery “gigafactory.” The planned facility is set to employ 6,500.
It is also the keystone to Tesla’s Model 3, a promised “mass market” electric car that company chief Elon Musk has said could be sold for as little as $30,000.
The electric car maker reported earnings using a different accounting method that it says better reflects its financial position by booking revenue more quickly. That method showed revenue for the quarter increasing by 55%, to $858 million. Income for the quarter, the company said, was $16 million, or 11 cents a share.
Tesla stock closed 2.5% at $223.
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