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Tesla production up, but company posts loss
Posted On Feb 14 2016
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In a tweet this morning, Musk confirmed that reservations for the vehicle will open at the same time as it is revealed to the world – with a $1,000 deposit necessary. The carmaker is counting on the plant’s manufacturing cost reductions and efficiencies to help keep battery costs down for its lower-priced Model 3.
Tesla Motors said Wednesday its vehicle production and sales continued to grow, but the company still recorded a $320 million loss in the final quarter of 2015. The electric vehicle maker also expects its average vehicle transaction price to grow modestly in the current year.
Despite losing money last quarter, Tesla shares are still up after their earnings report. Why?
“I feel very good about things right now”, Mr Musk said.
Musk also promised to unveil more details on Model 3 in the coming weeks. That option was offered on the Model S and Model X when they went on pre-order years ago.
Tesla had been burning cash a rate of more than $400 million a quarter for more than a year as its spending ramped up and deliveries of the Model X hadn’t begun. Past year the company delivered 50,000 of the Model S, a jump of 60 percent from 2014.
In a conference call Wednesday, Musk said the company has been focused on meeting that challenge rather than boosting sales.
Tesla also said it will post positive net cash flow this year, despite capital expenditures worth $1.5 billion all of which – the company hopes – will be funded internally.
All that said, the extent of what we’ll see of the Model 3 next month is still anyone’s guess.
The Model 3 is for mass market purposes and the Giga factory is specially established for that objective.
Currently, the Model S and Model X crossover SUV are both unique vehicles in their respective segments as there are no offerings from OEMs competing against the two models.
Musk is not anxious about competition in the industry particularly from the all-electric Chevrolet Bolt, which has a similar price tag to the highly-anticipated $35,000 Model 3.
