Tesla reports Q2 losses of US$58.9m, plans new Model X

4 Aug 2011

California electric car maker Tesla Motors has released details of its preliminary Q2 financial results, with the company reporting losses due to its continued R&D focus, as it plans to vamp up its development of its Model S sedan and develop a new Model X crossover electric vehicle.

The Palo Alto, California-based company had a loss of US$58.9m, or 53 cents a share, compared with a loss of US$38.5m in the same period a year ago. Tesla took on an extra 150 new employees in the second quarter and is continuing to inject money into its R&D efforts, with the company planning to bring its Model S sedan to market by mid-2012, a car it predicts will “not only redefine the EV but will set a new standard for premium sedans”.

Just last month, Tesla signed a US$100m deal to build the powertrain for Toyota’s electric Rav4, which Toyota plans to bring to market in 2012. Last year, Toyota made a US$50m investment in Tesla.

Total revenue for Q2 2011 at Tesla was US$58m, more than double the revenue the EV maker made in Q2 2010 and the highest quarterly revenue in the company’s history since it was founded in 2003. Demand for its Roadster was cited as being the main reason for Tesla’s revenue for the quarter.

Tesla Model S

The Tesla Model S sedan, which will set you back US$49,900 when it reaches the marketplace in 2012

Tesla is aiming to make its first customer deliveries of the Model S, which has a 300-mile charge, by mid-2012. The car will have a base price of US$49,900, which includes a US$7,500 federal tax credit.

The company says it is hoping to reach an annualised run rate of 20,000 units of the Model S. Tesla says it had more than 5,600 reservations for the Model S in July, with these reservations requiring a minimum US$5,000, refundable deposit. Between 40-50pc of these reservations came from California.

CEO Elon Musk: “phenomenal across the board”

Yesterday, CEO Elon Musk, who is also featuring in the upcoming electric car documentary Revenge of the Electric Car, took a conference call with analysts where he said this was the best quarter in Tesla’s history.

“It was just phenomenal across the board and we saw a tremendous demand for Roadster, for Model S, well over 5,000 products, almost all of next year’s production of Model S.”

Tesla Roadster Sport

Phasing out the Roadster

In Q2 2011, Tesla said it delivered 190 Roadsters – a unit growth that was almost 35pc higher than the same quarter last year – with roughly half of these Roadsters delivered to international customers. It said that as of 30 June 2011 it had delivered about 1,840
Roadsters worldwide. Tesla plans to sell the last of its North American Roadsters by early 2012 and to continue selling the EV in Europe and Asia until its 2,500 inventory is completed.

In a statement, Tesla said this transition is “planned to mirror the geographic rollout of deliveries for Model S, which will begin in North America, followed by Europe and then Asia.

“As we wind down our selling efforts on the Roadster in the United States through the balance of this year, we plan to transition our sales team to more active support of Model S.”

Plans for the Model X crossover

With the US$231m funds raised in its follow-on offering in June, Tesla is now planning the design of its next vehicle, the Model X crossover, which it intends to provide the “functionality of a minivan with a design as cool as an SUV”.

Tesla is aiming to reveal its Model X prototype in late 2011.

Because it is leveraging the Model S architecture and powertrain technology for the Model X, Tesla anticipates that the new EV can be brought to production quickly for its first customer deliveries in late 2013.

Projects in the pipeline

Yesterday, Musk indicated there are some other projects at Tesla that could not be disclosed yet.

“So there are going to be some projects that for proprietary reasons we want keep sound about. And so the timing is right to unveil them. There are a couple of those going on that I think are going to be very exciting when people learn about them, but we don’t want to talk about it publicly,” he said.

Tesla is also making progress on its new Tesla factory in Fremont, California, where it will manufacture the Model S, followed by the Model X. The factory, which Tesla bought from General Motors for $US42m, will feature the Schuler press, one of the largest hydraulic presses in the US according to the company.

Retail strategy

Tesla is also elevating its retail strategy and has opened stores on Santana Row in San Jose, California, and in Park Meadows near Denver, Colorado.

“The retail strategy is going gangbusters, two new stores that have a new approach,” said Musk yesterday.

Main photo: Tesla Roadster, pictured in Japan. All photos courtesy of Tesla Motors

Carmel Doyle was a long-time reporter with Silicon Republic