Tesla announces charging network, earnings shortfall
Tesla’s Musk: Stations will use solar power.
LOS ANGELES -- Tesla Motors, the fledgling electric vehicle maker, is discovering that mass production is difficult and expensive.
The company last week announced a sharply lower earnings restatement for the year because of production shortfalls and quality control concerns. The announcement somewhat overshadowed Tesla's unveiling a few hours earlier of a nationwide high-speed charging network for its vehicles.
The 2012 earnings estimate fell to the $400 million to $440 million range, down from its prior forecast of as much as $600 million.
Tesla says the new outlook comes from production falling short of expectations.
"We are dependent on our suppliers, the vast majority of which are single-source suppliers," the company said in a filing with the U.S. Securities and Exchange Commission. "The inability of these suppliers to continue to deliver, or their refusal to deliver, necessary components of our vehicles in a timely manner at prices, quality levels and volumes acceptable to us would have a material adverse effect on our business, prospects and operating results."
Tesla said its assembly line has not yet reached mass-production levels, peaking at 77 units weekly. Tesla hopes to build 400 Model S units per week by year end, putting it on pace for its 2013 target of 20,000 units.
To meet its short-term cash flow needs, Tesla will offer a secondary round of 4.3 million shares of common stock, priced at $150 million. The automaker also will draw down the last $33 million of its $465 million Department of Energy line in the third quarter, while delaying its third-quarter interest payment on the bulk of the loan.
On the plus side, the company said reservations for the Model S sedan and Model X crossover were about 13,000 units, up from about 11,500 on June 30.
Tesla's proposed network of 100 stations will be able to deliver three hours of highway driving range with a 30-minute charge. CEO Elon Musk said the cost of the network will be between $20 million and $30 million.
Each station will have between four and six charging ports and will be at key highway rest stops near established restaurants, Musk said.
Only for Tesla
Tesla secretly developed four California stations and unveiled them operationally last week. Tesla owners drove from Las Vegas to Los Angeles on one stop, and a New York Times reporter made a 500-mile, one-day drive from Lake Tahoe to Los Angeles.
Two more stations will go online in early October, with the web expanding to Las Vegas, northern California and Oregon by next summer, Musk said.
By the end of 2015, Tesla charging stations will be no more than 200 miles apart, well within the vehicle's driving range, Musk said.
Sadly for owners of other brand electric vehicles, and even the original Tesla Roadster, the Tesla chargers will only work with the Model S and future Tesla models. That is because the 100-kilowatt current is too powerful for lesser battery packs, Musk said. As a bonus for Tesla owners, all charging will be free.
The stations will get their power from solar panels mounted overhead, courtesy of Musk's sister company, Solar City.
The panels will generate more power than charging cars can draw. So on a net basis, the stations will add to the electrical power grid even if cars are charging at night or in cloudy weather.
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