Tesla says quarterly loss triples
Electric- car maker predicts a profit for this year
Tesla Motors reported Wednesday that its losses nearly tripled in the fourth quarter of last year, as the company revved up production of its luxury electric cars and built a massive battery factory in Nevada.
And yet, the company also forecast profitable days ahead, sending its battered stock higher in after- hours trading.
Tesla’s quarterly loss hit $ 320.4 million ($ 2.44 per share), up from $ 107.6 million ( 86 cents) during the same period of 2014. Losses for the entire year totaled $ 888.7 million, up from $ 294 million in 2014.
“Tesla likes to bill itself as a tech company, not an automobile company, but even tech companies have to turn a profit eventually,” said Karl Brauer, senior analyst at the Kelley Blue Book auto information service. “While volume and revenue are both growing, costs continue to outpace both.”
The upstart automaker has managed only one profitable quarter, in 2013. But Palo Alto’s Tesla predicted
Wednesday that it would reach “moderate” profitability in the fourth quarter of this year.
Tesla even forecast that when one- time expenses were stripped out, the company would turn a profit for the entire year. Along the way, Tesla plans to add 80 stores, build 300 roadside charging stations, expand into Mexico and deliver 80,000 to 90,000 cars worldwide. Last year, Tesla delivered 50,580 vehicles, at the low end of its own predictions.
Despite the upbeat forecast, Tesla’s latest earnings report included several red flags.
Production of its newest car — the Model X crossover SUV, which hit the market last fall — continues to lag. Tesla reported that in January, it limited production for an undisclosed period of time to focus on quality control. Only 507 were produced in the fourth quarter of last year.
The company now says Model X production should approach 1,000 cars per week in the second quarter.
“The mistake we made with the Model X, which I really think we’ve taken to heart at Tesla, is we put too many new features and technologies, too many great things at once, into a new product,” CEO Elon Musk told Wall Street analysts during a conference call Wednesday. “I do think there was some hubris there, with the X. The end result there, however, is the Model X is an amazing car. I think it’s probably the best car ever.”
Worries about the Model X have hit Tesla’s stock hard. Shares have fallen about 40 percent since the start of the year, dropping to levels not seen since 2014. But Wednesday’s report, released after the market’s close, seemed to cheer investors. Shares rose more than 11 percent in afterhours trading to hit $ 160.25.
The company also argued that falling gasoline prices pose no threat to sales of its electric cars.
The Model S sedan, according to the company, outsold all comparable, gas- powered luxury sedans last year, including cars from Audi, BMW and Mercedes- Benz. And while Model S sales grew by more than 50 percent in 2015, sales of all of its direct competitors shrank.
“It’s really rare to see situations like this,” Musk said. He called the car’s ability to steal market share from such strong competitors, “a great achievement of the Tesla team, and I think it’s also great for the world, because that’s ... fewer gas guzzlers out there on the road.”
Tesla still plans to introduce its next car, the $ 35,000 Model 3, at the end of March and begin production in 2017.