Tesla Loses Over $4K on Each Car Sold

Tesla Loses Over $4K on Each Car Sold

Tesla is losing more than $4,000 on every Model S it sells.

Last quarter, the American automaker went through $359 million in cash despite delivering a record 11,532 vehicles to customers. Of course, the company is getting ready to launch its next vehicle, the Tesla Model X, an all-electric crossover. CEO Elon Musk has given himself a deadline to make enough money for mass producing multiple models by the first quarter of 2016, while expanding the business of manufacturing electric power storage systems.

As of June 30, Tesla had $1.15 billion on hand, down from $2.67 billion a year earlier. Tesla reported an operating loss of $47 million, which makes the loss per car more than $4,000. Most of its cars are made to order, so Tesla has to also find a way to streamline its mass manufacturing system.

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Tesla confirmed that it plans to spend $1.5 billion in capital this year in order to get manufacturing of the Model X up and running. The next new model won’t come until 2017, the Model 3, meaning capital spending should drop next year. Musk is considering options to raise more capital as a risk reduction maneuver and hasn’t ruled out the idea of selling more stock.

The automaker hopes to hit a sales goal of 500,000 units a year by 2020, much of which will be contingent on how well the Model 3 turns, which is aiming to have a 250-mile all-electric range while starting from $35,000.

[Source: Automotive News]

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  • Eric Cameron

    That’s not too bad, considering all the R&D being invested into. PowerCell, Gigafactory, Model X, Model 3, new Roadster, etc… there’s a lot of money required to make a brand as big as any other automaker. It’s not doom and gloom yet. Wait until after Model 3 comes out and then we’ll see what the company looks like.

  • smartacus

    Build less cars = lose less money
    so if they stopped building cars altogether, their losses will be almost completely diminished 🙂

  • Glen

    Yep, they might be losing money on each car but they will make it up on volume! 😉
    It’s going to be close. From this article, they have $1.15B left and plan on spending $1.5B. Through August, they are averaging just over 1800 Model S sales per month. Figure around $110K per car and that’s almost $200M per month in revenue. Four months left, $800M total revenue (losing a bit per car). $1.15B – $1.5B + $800M leaves about $450M in working capital. Might sound like a lot to you and me but I think the investors will be quite nervous seeing less than a billion dollars in working capital. However, the article did state he might be looking for an additional cash infusion and didn’t state how much of the $1.5B has already been spent this year. So we’ll have to see what they state in the next couple of quarterly reports.
    Love the look and feel of the car. Drives like a bat out of hell on steroids. I’d be happy to have one in my garage if I could afford it and the cost to put in a charging station. Good luck!!!