Tesla Motors needs to make a profit and is counting on the Model S to get it there. The electric car company began shipping the sedan in late June and the hoopla surrounding the rollout has boosted the Model S reservations to about 12,200 now, compared with roughly 11,500 by the end of June.
“We obviously don’t have a demand problem. One of the biggest reasons people don’t put down a reservation payment for Model S is you have to wait a year, and if you need a car you need a car,” said CEO Elon Musk, during a conference call with analysts to discuss the company’s second-quarter earnings.
Tesla expects to ship a total of 5,000 Model S in 2012, but the big delivery push won’t happen until the fourth quarter. The company plans to ship roughly 500 of the car in the third quarter and the rest before the year ends. In 2013, Tesla plans to ship 20,000 of the Model S.
Analysts questioned whether Tesla could ramp up so quickly and do it without glitches, given the short period of time it will have to accomplish it. Musk said it’s not unusual for a new car to have a low production rate at the start. Plus, the company continues to trouble-shoot problems. It already has had to change one supplier and replace an interior trim that looked good in a sample but not so swell when it showed up inside a car, he added.
Musk offered assurances of the company’s production ramp up by saying that he expects the annual production rate of Model S to reach over 20,000 by the end of 2012.
“At the end of next year, there is a pretty good likelihood that we will be at the 30,000 per year runrate,” he added.
Tesla is building some kind of “super charger” station, a project Musk had hinted previously, and on Wednesday he suggested that the company will unveil it in September, depending on whether Tesla could finish the construction and secure all permits. The station is supposed to add 150 miles of charge to Tesla cars in 30 minutes. He remained mum with the details of the project but promised a showstopper.
“I’m really excited about the announcement. It’s way cooler than anyone realizes,” Musk said. “I’ll have a profound effect on how the public sees electric vehicles. There will be a few surprises.”
Here are the details about Tesla’s financial results:
Revenues: $26.65 million, down from $58.17 million from the second quarter of 2011.
Losses: $105.6 million, or $1 per share, compared with $58.9 million, or $0.60 per share, in losses from the year-ago period.
Model S: Ship 5,000 of the Model S during 2012. About 500 of them will be delivered to customers during the third quarter and the rest in the fourth quarter. The company was rolling off the assembly lines five cars per week back in June, and it has since “approximately doubled” that pace.
Roadster: 89 Roadsters were sold during the second quarter. Another 130-140 Roadsters are left and should be sold by the end of 2012.
Guidance: Tesla expects to generate $560 million to $600 million in revenues for 2012. In 2013, the company expects to ship at least 20,000 Model S and achieves a gross margin that will “exceed 25 percent,” Musk said.
Powertrain project: Tesla announced a powertrain development program for Mercedes-Benz earlier this year, and it began to record revenues from the project during the second quarter. Asked how Tesla’s powertrain compares with competitors’, Musk said, “I think Nissan should double down on their electric vehicle investments to improve their product; it’s not where it needs to be.”