Tesla losses widen but EV maker lifts 2012 revenue target by $10M
Model S deliveries to begin earlier than expected
Tesla Motors Inc. reported a first-quarter net loss of $89.9 million, worse than its $48.9 million loss last year, as the cost of bringing the Model S electric sedan to market mounted.
The electric vehicle maker raised its 2012 revenue target by $10 million because it expects to deliver the new Model S earlier than planned.
Tesla has described 2012 as a "year of two halves" with the Model S launch as the dividing line. Ninety percent of the company's revenue this year will come from the sedan. Tesla expects full-year revenue of between $560 million and $600 million.
Earlier, it expected at least $550 million in revenue.
Tesla Motors CEO Elon Musk said he is confident Tesla will generate a 25 percent gross margin in 2013 as revenue from Model S sales pour in.
Musk also expects economies of scale to result in declining costs per kilowatt-hour for the battery pack.
"Scaling up by a factor of 10 should result in a drop in costs by half," Musk said Wednesday in a conference call with analysts.
First quarter revenue was $30.2 million, down from $49 million last year, reflecting the end of Roadster sales in North America.
Despite the long wait to receive a reserved car, Tesla is "not seeing any significant falloff from people … who are not sure they want the car. We have an extremely high rate of people wanting to put down the remainder of the money," Musk said.
Despite some reports of multiple orders from consumers looking to "flip" the vehicles, Musk said those numbers are "infinitesimally small."
Tesla reported 416,000 walk-in visitors to its six "new design" dealerships during the first quarter, despite having, "no advertising and no test drives," Musk said.
"No Model S in the store adds to the sales challenge. We will see acceleration of reservations once people have a car they can actually (test) drive," Musk said.
Added Deepak Ahuja, Tesla chief financial officer: "We are very efficient in our selling compared to the traditional dealership model."
Although Tesla hopes to begin deliveries in June, the Model S still has no NHTSA crash safety rating. Once Tesla finishes crash tests required by U.S. safety regulators, Tesla can begin delivering the sedan.
However, Musk said that NHTSA cannot test a car until it acquires one from Tesla, and he did not know when that will happen.
"I do not know where we are in the [NHTSA testing] queue. We are very confident that it will be a five-star safety rating, the safest car on the road. We have certain architectural advantages, like a much longer crumple zone in the front because we don't have to make room for an engine," Musk said.
Another manufacturing snarl: Some stamping dies are still to be delivered. That means some early-delivery vehicles will be assembled using prototype tooling. But Musk is confident that all tooling will arrive in time for larger-scale production.
"We plan to continue making customer deliveries on a slow, methodical ramp, and remain confident in our target of 5,000 vehicle deliveries by year end," he said, adding he expects the Fremont, Calif., plant to be building cars at a 20,000-unit-per-year run rate at year's end.
Reuters contributed to this report.
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