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Tesla Reports Losses, Vows to Push Forward

By DrivingSales News on May 8, 2014

A report, released on Wednesday of this week by Tesla, announced a net loss of 49.8 million dollars in the first quarter. The announcement hasn’t come as a shock as the company as invested heavily in making their Model S viable for usage in the Asian and European Markets. The CEO, Elon Musk also explained on a conference call that Panasonic is likely expanding their involvement with the 11-year-old electric car company. Panasonic reportedly signed a “letter of intent” to be involved in the construction process of the so-called “Gigafactories,” that Tesla would like to build to keep up with demand for their vehicles.

Other important takeaways from the conference call by Musk include his announcement that the groundbreaking for one of those “Gigafactories,” is expected next month. He also noted that California is still in the running to host the site. The factories are expected to cost about 5 billion dollars to build. However, those factories may not be needed for the Model X as soon as initially predicted. The AWD dual-engine SUV, is going to be delayed until at least the second quarter of 2015.

Tesla is certainly not shying away from investing in their future.  Construction is planned for at least one 5 billion-dollar factory. Reports from Musk have indicated that research and development could grow 30% from the first to second quarter. Tesla is spending at a rate that puts heavy pressure on their vehicles to sell, and factories to get correctly assemble the zero emission vehicles on time.

Time will tell the tale of whether or not Tesla will further stabilize their financial position and create a less expensive electric car for the masses, however, there is one thing to keep in mind. Tesla has been on the verge of financial collapse in the past, and somehow, someway, under the direction of Elon Musk, they have pulled thought.  

Is Tesla the future of the auto industry, or will they eventually fade away? 

 

Comments

Musk is the kind of gentleman that will see things out until he gets his way. He certainly has the money to be in it for the long hall, and now he may have a personal vendetta against the Automotive industry.

Tesla has deep pockets, and friends with deep pockets.

May 8, 2014

How good could Tesla eventually be? Could they wipe out the Retail Auto Industry?

May 9, 2014

No, I don't think they could. That isn't to say that the retail auto industry couldn't be made irrelevant i.e. Travel Agent, Appliance Salesperson, Shoe Salesperson, etc.

Just saying, not hatin'

May 9, 2014

Tesla is a good first step in the evolution of alternative fuels for automobiles. I do not believe that a pure electric car is the solution and over the coming years you will see more electric/biofuel hybrids appear. Major energy companies like BP, ExxonMobil, and Dupont are investing hundreds of millions on new biofuel reserach (http://www.fool.com/investing/general/2014/02/16/big-companies-are-buying-into-biofuels.aspx ) and within the next few years we will see the fruits of their labors start appearing in fleet testing.

The end goal is a renewable, and non-polluting fuel source which would then make the CAFE standards obsolete. They have never been a real solution to our problem and have only treated the symptoms of pollution and fossil fuels, but not addressed the cure. Once Tesla has proven the technology other OEMs will adapt. More work to do, but with the government bringing in billions in gasoline taxes they have no incentive to change the rules or solve the problem.
If you want to see how ineffectual our government has been over the the last four decades watch this Jon Stewart Video
http://thedailyshow.cc.com/videos/n5dnf3/an-energy-independent-future

May 11, 2014

My thoughts are that Tesla will be around for the long haul. It will just take time... and $$$. Their brand position is in good space. It's only time before they come out with vehicles that are more cost effective. I personally would love to own one!

May 13, 2014

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