Tesla Motors Inc said its second-quarter loss increased to $62 million, or 50 cents a share, from a $31 million loss a year ago as the company ramped up spending to develop its second electric vehicle, added workers and expanded into China, reported The Wall Street Journal.
Tesla said it delivered 7,579 Model S vehicles in the quarter, a bit above the 7,500 it had forecast. But Tesla lowered its forecast for revenue and deliveries for the third quarter to 7,800 vehicles from 9,500 because it had to shut down its factory in Fremont, Calif., to install equipment in July. Tesla said it should be able to ramp up production in the final three months of 2014 to reach its sales goal of 35,000.
Earlier Thursday, Tesla and Panasonic Corp. said they had reached an agreement for the battery maker to participate in the construction and operation of the world's largest battery factory in the U.S. The so-called Gigafactory would be an investment of as much as $5 billion and employ 6,500 people, giving Tesla battery capacity for up to 500,000 vehicles a year.
Panasonic, earlier Thursday, reported that operating profit rose 28% to ¥82 billion ($798 million) in the April-June quarter. Sales increased 1.5%, helped by strong performance in its housing and automotive businesses. Net profit dropped 65% owing to a one-time gain in the year-ago period from a change in its pension scheme.
Tesla said it expects its annualized pace of deliveries will hit 100,000 vehicles by the end of next year, as it ramps up production of its Model X sport utility vehicle. In addition to that forecast, Chief Executive Officer Elon Musk boldly predicted that within 10 years, Tesla's electric cars are "heading to a place of no contest when it comes to gasoline," meaning electric cars will be lower cost.
Tesla said in its shareholder letter that it began site work near Reno, Nev., in June but continues to evaluate other locations in Arizona, California, Texas and New Mexico. Mr. Elon Musk, in a call with analysts, said the company would begin site work at one or more other sites and that the company was trying to work with local governments, which he expected would pay for up to 10% of the total project costs.
Revenue for Tesla rose 89% from a year earlier to $769 million. The average automotive revenue per electric car was about $101,000 during the quarter. The company said in a statement that demand for the Model S continues to rise in North America and Europe.
"We believe these markets remain underpenetrated," the auto maker said, addressing concerns expressed by some analysts that sales growth in the U.S. and Europe was cooling off.
Tesla addressed another concern, saying that increased battery cell production by Panasonic in Japan should allow for higher production.
Tesla's earnings were reduced by a noncash interest expense related to raising $2.3 billion in convertible notes earlier this year and stock-based compensation for executives. Tesla's loss from operations rose to $28.7 million as research-and-development costs and overhead jumped 20% combined from the first quarter.
Earnings excluding stock-based executive compensation and the noncash interest expense were $16 million, or 11 cents a share, better than the 4-cent a share consensus forecast of analysts polled by Thomson Reuters.
Tesla adjusted revenue, which takes into account deferred leasing revenue, was $858 million for the quarter. The leases help overall deliveries, but put a lid on top-line GAAP revenue.
Similar to the second quarter, Tesla said its costs would jump in the third quarter to fuel research and development and new employment, with R&D spending rising 20% and overhead increasing 15%. The company said it would be "marginally profitable" on a basis that adjusts for the lease accounting, stock-based compensation and noncash interest expense.
Tesla also said its spending on capital expenses for 2014 could be as high as $950 million, up from an earlier forecast of $850 million.
"We are not currently showing all our cards," he said. "Our cap-ex and R&D numbers are better than they appear because there are things you don't know about."
