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Tesla is racing to release its Model S by 2012. As a result it posted another big loss this quarter, burning through a fair chunk of its cash at hand.

Tesla will also deliver an electric version of the Toyota RAV4 crossover in 2012.  (Source: New and Fastest)
Tesla has already lost more this year than it had all of last year

The good news for Tesla Motors is that the company has plenty of cash on hand thanks to government grants and an incredibly successful initial public offering that raised $226M USD.  The bad news is that the company is burning through cash fast as it attempts to develop new vehicles and expand its distribution network.

Reporting financials for the first time as a publicly traded company, Tesla just announced a loss of $38.5M USD for its second fiscal quarter, 2010.  Year-to-year it reports its revenue rose 5 percent, to $28.4M USD.  A year ago the company only lost $10.8M USD, though.

Tesla is looking to begin producing and selling its upcoming Model S mass market luxury sedan in 2012, priced at $57,400 USD.  The car will retain some luxury trappings and have a range of 160 miles.  Tesla will produce the new model at the the former NUMMI factory, located in Fremont, California, which it obtained from Toyota as part of a joint development deal.  The factory had been scheduled close after former co-operator GM pulled out, in the wake of its bankruptcy.

Tesla also has a hand in the development of an electric version of Toyota's RAV4 crossover SUV which will also hit the market in 2012.  Toyota gave Tesla a relatively meager $50M USD to help develop the plug-in, but also gave it access to the NUMMI plant and other perks.  Tesla also recently revealed that it is developing 3 other vehicles internally -- another crossover/SUV, a Cabriolet, and an electric van.

Tesla also has been opening new stores in recent months.  Last month it shipped its first Roadsters to Canada and Japan.

For Tesla, its current financial predicament basically boils down to weathering the storm, which is never an easy position for a company.  If the company can stay afloat through 2012 and make its deadlines for the Model S and Toyota RAV4 vehicles, it will be poised well to return to its short-lived profitability of 2009.

In total Tesla has already lost more this year ($68M USD) than it did 
all of last year ($55.7M USD).  One promising sign, though, was that Tesla significantly improved its gross margin to 22 percent, up from 8 percent from a year before.  Gross margin is a measure of profitability that weighs production costs versus sales costs.

While still above the $17 IPO price, shares of Tesla (TSLA) have plummeted from a high of $22 earlier this week to $19.80 following the financial report.



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Wait...
By MozeeToby on 8/6/2010 10:39:34 AM , Rating: 2
So, they've burned through 20% of their cash on hand, at a point in their life cycle where they aren't producing anything and are investing tones of R&D money into the development of their next product. The article isn't exactly clear, at one point it sounds like the $38M figure is for 2 quarters and in another it sounds like it's only for the second quarter.

That's a pretty big difference, considering their next major product is supposed to start selling in 2012. If it's for half a year, they have just enough money (if nothing changes for better or worse) to make it to the release of the Model S. If quarterly, then they don't. Which, like I said, is a huge difference.




RE: Wait...
By JasonMick (blog) on 8/6/2010 11:07:28 AM , Rating: 5
quote:
Reporting financials for the first time as a publicly traded company, Tesla just announced a loss of $38.5M USD for its second fiscal quarter, 2010


quote:
In total Tesla has already lost more this year ($68M USD) than it did all of last year ($55.7M USD).


Seems pretty clear to me -- it lost $38.5M USD this quarter, $68M USD in total this year ($29.5M in Q1 2010). Hopefully that clears it up for you.

quote:
If it's for half a year, they have just enough money (if nothing changes for better or worse) to make it to the release of the Model S. If quarterly, then they don't.


Agreed that things look pretty rough for Tesla, though. It does have $465M (U.S. Gov't) plus $220+M USD (IPO) but if it keeps burning through cash at this rate, it will have lost $300M+ USD by the end of Q2 2012.

I hope that it does makes it because I think it will push GM and Ford harder to innovate when it comes to EVs and more competition is always a good thing.

And if it *doesn't* make it after all the money the gov't poured into it, the taxpayers lose out doubly.


RE: Wait...
By MozeeToby on 8/6/2010 11:31:06 AM , Rating: 2
Whoops! I must have skimmed over the parened part, ironic considering how much subclauses litter my own writing.

The only possible bright spot in these numbers is that they should get better next year as their partnership deals with Toyota (and others) ramp up. Of course, that all depends on what point Tesla gets paid in those deals. If they're getting paid for their knowledge and R&D they could start bringing in revenue immediately, but if its some kind of profit sharing deal they probably won't see a dime from those deals until 2013 or later.

If they knew this dry spell was coming (and they had to have some idea what it would cost to develop the model S) that would go a long way to explaining why they wanted such a large loan from the government. Without it, they would have had to continue manufacturing on the Roadster while simultaneously doing R&D on the Model S, and probably at a much slower rate to boot. With the loan, they have enough to bring the Model S to production, even if their margins are a bit closer than I would like.


RE: Wait...
By Jedi2155 on 8/6/2010 11:36:19 AM , Rating: 2
The article does not seem to mention that Tesla just paid $42 million for a manufacturing plant in the past quarter to start producing the Model S.

That probably had a huge effect to their bottom line as they are still investing heavily into infrastructure, research and design.


RE: Wait...
By shin0bi272 on 8/6/10, Rating: -1
RE: Wait...
By MozeeToby on 8/6/2010 3:32:05 PM , Rating: 4
The whole freaking point of the Volt is that it isn't limited to the batteries range, at all. You can take it on a cross country road trip just like a normal car and never stop to recharge once, all the while getting 50+ mpg.

Your comments on power and torque are more accurate, but only to a certain point. If you take into account the fact that electric motors have a nearly flat powerband a 100 hp motor will easily outperform a 150 hp motor.


RE: Wait...
By Pirks on 8/6/2010 3:49:25 PM , Rating: 2
quote:
chevy volt going a whopping 40 miles between charges
Tesla S does 160 miles, so get real please.


RE: Wait...
By Spuke on 8/6/2010 4:03:48 PM , Rating: 2
quote:
Tesla S does 160 miles, so get real please.
160, 230 or 300. Depends on which battery pack you buy. Besides, the Tesla Model S is $57,400. WAY more expensive than the Volt or Leaf and should have better EV range than either of those for that price.


RE: Wait...
By Iaiken on 8/6/2010 4:17:08 PM , Rating: 2
quote:
WAY more expensive than the Volt


Not really, remember that little gem about dealers wanting to sell the Volt for $61,000?

http://www.dailytech.com/Some+Chevy+Dealers+Sellin...


RE: Wait...
By Cheesew1z69 on 8/6/2010 4:20:14 PM , Rating: 2
That is also a MARKUP, the MSRP is still higher on the Tesla....


RE: Wait...
By Iaiken on 8/6/2010 4:52:11 PM , Rating: 2
And who's to say that Tesla doesn't put pressure on the dealer network to keep markups down until they can bring production costs down? Thus retail can stay the same and markups can go up. :P


RE: Wait...
By Spuke on 8/6/2010 7:25:42 PM , Rating: 2
quote:
And who's to say that Tesla doesn't put pressure on the dealer network to keep markups down until they can bring production costs down?
I don't think the price will change much but you bring up a point. The car ain't out yet and Tesla is kind of shooting themselves in the foot by announcing a price so soon. I'd hold off on that.


RE: Wait...
By Reclaimer77 on 8/6/2010 7:33:33 PM , Rating: 1
Well I wish I could say "I told you so" Jason, but for some reason I don't feel like cheering over my government flushing billions of our dollars down the toilet pushing an agenda that SHOULD be decided by the free market.

I said it then and I'm saying it now, Tesla was a waste of money.


RE: Wait...
By wookie1 on 8/9/2010 12:11:16 PM , Rating: 2
This should make it more clear how gov't grants crowd out private investment. Why would Ford try to compete with Tesla/US gov't? That's a loser's game, because the gov't can afford to take enormous losses to win while competitors go bankrupt trying to compete.

So you say, what if Ford also gets grants? That'd be just great, the gov't competing against itself, trying to see which company could be the bigger bottomless pit while supporting both.

I left GM out, of course, becuase they already have to do whatever the gov't wants, and get whatever money is needed to do it. So that would then be a 3-way money hole for this technology that may or may not be widely adopted despite the billions thrown at it.

If the technology is a winner, then there would be enough private money to support it.


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