Share “Tesla loses $50 million in 1Q as costs rise”

Tesla loses $50 million in 1Q as costs rise

Published on NewsOK Modified: May 7, 2014 at 6:13 pm •  Published: May 7, 2014
Advertisement

DETROIT (AP) — Electric car maker Tesla Motors lost $49.8 million in the first quarter as it accelerated the development of its new crossover and made improvements to its Model S sedan.

Tesla said it produced a record 7,535 Model S sedans during the period and delivered 6,457 to customers, but higher costs led to a loss.

Shares fell 7 percent to $187.50 in after-hours trading.

The company also said Wednesday that California is now in the running for a $5 billion battery factory it plans to build. Previously the company was only considering Arizona, New Mexico, Texas and Nevada for the factory, which is scheduled to begin producing lithium-ion batteries for Tesla's Fremont, California, car factory in 2017.

Tesla CEO Elon Musk said the company will prepare two separate sites for the battery factory to minimize the risk of delays. Work may begin as early as next month on one of the sites, he said. He wouldn't say which states are the finalists. California is a possible choice, he said, if the government can streamline the permitting process.

Musk said the gigafactory, as it's known in the company, will help Tesla cut its battery costs by 30 percent. But it has to be built by 2017 to supply batteries for the company's lower-cost Generation Three vehicle.

"If we don't have the gigafactory online when have the vehicle capacity online, we will be in trouble," Musk told analysts on the company's earnings conference call.

For the January-March quarter, research and development costs jumped 49 percent to $81.5 million as Tesla prepares to launch the Model X crossover next year. Musk said the Model X has some tricky issues, including the seals around its unique back doors, which slide upward instead of opening outward.

Continue reading this story on the...