Tesla Reports Continued Losses on Eve of Model 3

Elon Musk Chief Executive of Tesla Motors Inc on Wednesday vowed investors that the electric luxury vehicle maker will start making money this year, sending the shares up of the company sharply regardless of a wider fourth-quarter loss.

In a letter to investors, Tesla also offered guidance on how many vehicles it will deliver in 2016: 80,000 to 90,000 Model S’s and Model X’s. The company’s heavily shorted stock has lost more than a third of its value in the past year, up to Wednesday’s close.

The company delivered 76% more Model S cars in 2015 – 14,037 in the fourth quarter alone – than it did in 2014, and the company launched the new Model X in 2015, netting $1.75 billion. That auto will have a starting price of about $35,000 before government incentives and subsidies and will launch in 2017, Tesla has said.

Tesla is expected to preview the Model 3 in an event March 31, though it’s not clear whether the company will reveal the entire vehicle. The Model X, for instance, finally began shipping late last year after a two year delay. On the call following fourth-quarter results on Tuesday, Musk said Tesla expects the vehicle to be “really well-received” and confirmed production and delivery at the end of 2017.

Tesla straddles the digital technology and automotive industries, which have been hard hit this year by investors anxious that growth is slowing in both sectors. Tesla’s supply of cash on hand fell to $1.2 billion at year end, down from $1.4 billion at the end of the third quarter.

CEO Elon Musk said he’s not anxious about competition from the all-electric Chevrolet Bolt, which will have a similar price tag and range and will go on sale at one year before the Model 3. Full-year revenue was expected to climb almost 50% to $5.38 billion.

So far we’ve seen concept renderings and a few full-size foam forms resembling what could be the Model 3, which is said to be 20 per cent smaller and much lighter than the Model S.