As Tesla CEO Elon Musk put it in the opening of his first earnings call as the head of a public company, “There’s not much news financially.” Only six weeks ago, the electric vehicle maker debuted on the public markets, meaning it recently opened up its books via SEC filings. However, what’s not new, and what was reiterated in the company’s first earnings today, is that Tesla will continue to lose money for quite some time as it gets ready to produce Tesla’s second car, the Model S, an electric sedan.
For the second quarter (the three months ended June 30, 2010), Tesla had a net loss of $38.52 million, down from losing $10.87 million for the second quarter of 2009. That loss was on revenues of $28.41 million for the quarter, up slightly from revenues of $26.95 million for the second quarter of 2009. So, no surprises.
Musk tried to put the losses in perspective on the earnings call. “We’re spending a half a billion dollars in development and tooling over the course of 10 to 12 quarters building the Model S,” said Musk. “It’s not possible to be profitable with that level of growth,” which Musk emphasized is “astronomical.”
Musk said the biggest milestone for Tesla this year will be to complete design and production of its alpha version of the Model S, which will be about 80 to 90 percent close to the final production Model S.
Tesla says it has already released the CAD data of the Model S to external suppliers and has started lab testing the prototype powertrain components for the Model S. “Most” parts of the Model S that have long lead times have already been sourced, said Tesla, including the touch screen, the seating and seat belts, wheels and tires. Prototypes of the Model S battery and powertrain have been manufactured and are being tested said Tesla.
On the recently announced RAV-4 development deal with Toyota, Musk said that development will be taking place this year and next with prototypes, and that Tesla expects to deliver products to customers in the “2012 timeframe.” Musk described the deal as resurrecting the RAV-4 “but way better.” (LOL). Musk also disclosed that Toyota bought 3 percent ownership with its investment, and that Tesla will start generating revenues from the RAV-4 deal in the second half of 2010.
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