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Tesla Reports 2012 Loss, Predicts 2013 Profits

| February 20, 2013
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Tesla Motors Inc., the Palo Alto-based electric car maker, reported a loss of $90 million on revenues of $306 million in the fourth quarter of 2012, a result that fell short of analysts’ predictions and caused the company’s stock to drop in after-hours trading.

Tesla Motors' Model S (right) is the second model it has released. The Roadster (left) was its first. (Tesla Motors)

Tesla Motors’ Model S (right) is the second model it has released. The Roadster (left) was its first. (Tesla Motors)

The company delivered about 2,400 Model S vehicles, it said in a statement posted on its website.

Tesla reported a non-GAAP (generally accepted accounting principles) net loss for the quarter just under $75 million, or $0.65 per share. Its GAAP net loss was $90 million, or $0.79 per share for the quarter. In a Thomson Reuters survey, analysts had predicted that the company would post $298 million in sales and a loss of 53 cents a share.

We had to do some dumb things like fly tires from the Czech Republic. I kid you not. I wanted to punch myself in the face.”

Stock prices fell 3.26 percent in after hour trading in the first half hour after the 1 p.m. report.

But Tesla, which has always operated at a loss, said it expects to become profitable in a few months. Previously it had estimated that wouldn’t happen until the end of the year.

“We really have very high confidence that we’ll have a profitable first quarter,” said CEO Elon Musk in a conference call. “And I think that’s really a big deal. It took an enormous amount of blood, sweat and tears to get there, but we’re going to do it, and I’m really proud of that.” The company planned to deliver about 20,000 Model S units in 2013.

Ben Kallo, a senior analyst at Robert W. Baird, said his company would recommend buying the stock.

“Overall I think it was positive,” he said of the earnings report. In addition to the prediction of profitability, the company reached its production goals, and during the quarter, 6,000 people reserved the right to buy a car when one becomes available.

The company is controversial with serious questions about the demand for electric vehicles and the ability of a new car contender to muscle its way into an industry dominated by such large companies.

Over half the stock not held by insiders has been shorted by such pessimists, said Kallo. “There are a lot of disbelievers.”

Musk said the company is beginning to achieve economies of scale and develop a more reliable supply chain, efforts that have proved challenging until now. “We had to do some dumb things like fly tires from the Czech Republic,” he said. “I kid you not. I wanted to punch myself in the face.”

Earlier this month controversy swirled over a Feb. 8 account by New York Times reporter John M. Broder of a Model S test drive that ended with the car on a tow truck.

Musk protested, and an investigation by the Times’ Public Editor Margaret Sullivan found that Broder may not have perfectly followed instructions for operating the vehicle.

Demand for the Model S exceed supply, with 6,000 new cars already reserved by would-be buyers in the fourth quarter.

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