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Tesla, Gaining Momentum, Expects Big Jump In Sales in 2014

Feb 19 2014, 4:21pm CST | by , in News | Cars & Vehicles

Tesla, Gaining Momentum, Expects Big Jump In Sales in 2014
 
 

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Tesla, Gaining Momentum, Expects Big Jump In Sales in 2014

Tesla Motors said it expects to sell more than 35,000 Model S vehicles in 2014, a 55 percent jump over 2013, and improve its gross margin to 28 percent by the end of the year.

The company warned of higher operating costs and capital expenditures, however, as it invests in long-term growth. “We plan to expand production capacity for Model S and Model X, invest in our store, service and Supercharger infrastructure, complete the development of Model X and start early design work on our third generation car,” Chairman and CEO Elon Musk wrote in a letter to shareholders announcing fourth-quarter operating results.

The company had  $615 million in revenue on a GAAP basis, up 43 percent from the third quarter ($761 million in non-GAAP revenue), which included $15 million of revenue from regulatory credits, but no revenue from the sale of zero emission vehicle (ZEV) credits. The net loss for the quarter was $16 million ($46 million net profit on a non-GAAP basis), both of which included a $4.6 million net gain from a favorable currency impact.  The results included $40 million in operating cash (after capital expenditures), boosting Tesla’s cash on hand to $846 million as of December.

The biggest thing holding Tesla back, it seems, is battery production capacity, which should improve significantly in the second half of 2014, the company said. Musk said “very shortly” he will soon reveal plans for a new “gigafactory” which will integrate all elements of battery production — from precursor material, to cell, module and battery packs — in one facility. “This will allow us to achieve a major reduction in the cost of our battery packs and accelerate the pace of battery innovation,” Musk said.

That’s important as Tesla begins working on a less expensive, high-volume electric car for the masses. Musk said Tesla is confident it will be able to create “a compelling and affordable electric car in approximately three years.”

Musk, who is also chairman of Solar City, said that new battery factory would also address the solar power industry’s need for a massive volume of stationary battery packs.

Tesla shares are up 13 percent in after-hours trading. A conference call with investors will follow shortly.

Source: Forbes

 

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<a href="/latest_stories/all/all/31" rel="author">Forbes</a>
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