Production delays slash Tesla revenues(Read article summary)
Electric-car manufacturer Tesla says sales will be roughly $45 million for the third quarter, far below analysts' estimates of $80 million. Tesla will raise more money by selling 4.3 million shares of stock.
Electric car maker Tesla Motors Inc. said it is bringing in less money because of supplier problems and other delays in ramping up production of its Model S sporty hatchback.
In a Securities and Exchange Commission filing Tuesday, the Palo Alto, Calif., automaker said it has had trouble producing the number of vehicles it anticipated since launching production of the car in June.
Tesla said it will generate $44 million to $46 million in third-quarter sales, compared with the roughly $80 million analysts had projected based upon the company’s production goals.
“The Model S is an all-new vehicle which we are producing with new employees using new equipment. As our main focus is on quality, we have methodically increased our Model S production at a rate slower than we had earlier anticipated,” Tesla said in the filing.
“Our suppliers also must produce new products in sufficient quantities and quality levels to meet our increasing demand. Certain suppliers have experienced delays in meeting our demand and we continue to focus on supplier capabilities and constraints,” the automaker said.
The Model S is a luxury hatchback that offers seating for five adults and sells for about $50,000 to more than $100,000 depending on trim level and options. It is fast, boasting a zero-to-60 miles per hour acceleration of less than six seconds. The car has received rave reviews from the automotive press.
Tesla builds the Model S at a factory in Fremont, Calif., where it plans to also make the Model X, an electric SUV built on the same platform and sharing much of the technology, starting late next year.
As of this week, Tesla has built 255 Model S cars, and has reached a weekly production rate of 77 vehicles. The company wants to produce cars at a rate of 400 a week. Tesla anticipates building 20,000 cars in 2013.
Tesla also cut its annual revenue projection because of the delays. It said it will now bring in between $400 million and $440 million this year, down from previous estimates of $560 million to $600 million.
The automaker also announced plans to raise more money via a stock offering of 4.3 million shares and has granted the underwriter, Goldman Sachs, a 30-day option to buy almost 700,000 additional shares.
Tesla has fully drawn down a $465 million Department of Energy loan that is part of a program that makes funds available to makers of alternative-fuel vehicles. After the offering, the automaker will have about $228 million in cash.
Tesla also said it is about to open the first locations in its “Tesla Supercharger network,” a group of company-operated solar-powered electric charging stations that will allow Tesla drivers to charge their vehicles as they drive across California. The first six stations will be located in Folsom, Gilroy, Coalinga, Lebec, Barstow and Hawthorne. It will take about 30 minutes to give the vehicles a charge that lasts about 150 miles.