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Tesla expects to boost 2015 output to more than 60,000

Published 07/31/2014, 07:20 PM
Updated 07/31/2014, 07:20 PM
Tesla expects to boost 2015 output to more than 60,000

By Paul Lienert and Bernie Woodall

DETROIT (Reuters) - Tesla Motors Inc, the California-based maker of luxury electric cars, said it expects to build more than 60,000 cars in 2015, after spending heavily this year to update and expand its Fremont assembly plant.

Chief Executive Officer Elon Musk also said the company will fund 40 percent to 50 percent of the estimated $4 billion to $5 billion cost of building a new "gigafactory" to produce cheaper and more efficient battery packs for its future electric cars, including the $35,000 Model 3 range that is due in 2017.

After the market closed on Thursday, the company said it lost $61.9 million, or 50 cents a share, in the second quarter, as revenue nearly doubled to $769.3 million. (Graphic: link.reuters.com/bes52w)

The automaker has accelerated the expansion of the Fremont plant, which builds the $70,000-plus Model S sedan and will add a companion crossover, the Model X, next spring. Musk said the plant now can build up to 1,000 cars a week, and will double that by the end of next year.

Tesla expects to deliver about 35,000 Model S sedans this year.

On a non-GAAP basis, Tesla said it earned 11 cents a share, topping analysts' expectations of 4 cents. The company expects non-GAAP earnings to be about the same in the third quarter.

In the year-ago quarter, Tesla lost $30.5 million, or 26 cents a share, on revenue of $405.1 million.

The initial response from investors was mixed, with shares rising, falling, then climbing again after Musk's call with analysts. They closed at $223.30, down 2.5 percent, in regular trading.

Earlier on Thursday, the automaker announced a partnership with Japanese electronics giant Panasonic Corp to open the giant battery factory in the United States in 2017.

Musk confirmed that Tesla had broken ground near Reno, Nevada, for a possible factory, but said the company is still in negotiations with several states before a final site selection is made later this year.

He told analysts that Panasonic will fund about 30-40 percent of the factory, and other smaller suppliers about 10-20 percent. He said the initial cost to get the factory up and running would be less than $4 billion, with the total cost rising to $5 billion by full production around 2020.

Tesla built a record 8,763 Model S sedans in the quarter, and delivered a record 7,579 cars to customers, while being "unable to keep pace with increased demand" in North America and Europe.

The company plans to deliver about 7,800 cars in the third quarter. With the plant expansion, it projects fourth-quarter deliveries will nearly double to more than 13,000.

© Reuters. The dashboard of a Tesla Model S is shown at a Tesla Motors dealership at Corte Madera Village, an outdoor retail mall, in Corte Madera

Tesla said it expects to invest up to $950 million this year as it "slightly" accelerates spending on more production capacity and the battery factory. That's about $100 million than previously announced.

(Editing by Bernard Orr)

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