Tesla Motors Inc. (TSLA:US) is building Model S electric sedans faster than its initial 400-a-week goal as demand and the company’s production skills increase, Chief Executive Officer Elon Musk said.
“We’re above 400 a week at the current manpower, and not trivially above it,” Musk said July 10 in an interview at the company’s Fremont, California, plant, declining to elaborate ahead of Tesla’s release of second-quarter results. In late 2014, the pace is “going to 800 a week. I’m very confident we’ll get there,” said Musk, who is Tesla’s biggest investor (TSLA:US).
The electric-car maker’s struggle to reach the output target last year led it to miss a 5,000-car delivery goal for 2012 and its fourth-quarter loss widened after the company had to add temporary workers and resolve supplier snags. Musk has forecast Model S sales will reach 21,000 this year, with deliveries to Europe and Asia having begun in the second half.
Shares of Palo Alto, California-based Tesla have more than tripled this year as the popularity of its $69,900 Model S sedan helped bring a first-quarter profit this year, the company’s first. Tesla hasn’t yet said when it will release second-quarter results.
The carmaker named for inventor Nikola Tesla may report a second-quarter loss of 17 cents a share (TSLA:US), excluding some items, the average of 12 analysts’ estimates compiled by Bloomberg.
Tesla’s factory has 3,000 employees, including about 2,000 assembly workers, with two daily production shifts, Musk said.
“It will be interesting to see how far they can improve assembly-line efficiency because these guys aren’t a division of GM or some other big carmaker,” Karl Brauer, an analyst for Kelley Blue Book, an industry pricing and data provider in Irvine, California, said yesterday. “They can’t pull on decades of institutional knowledge.”
Tesla’s 5 million-square-foot (465,000-square-meter) factory, California’s sole auto plant, has had multiple lives. It opened in the early 1960s as a facility for the predecessor of General Motors Co. (GM:US), closing in 1982. Next it operated as a joint-venture plant for GM and Toyota Motor Corp. (7203) from 1984 until 2009. Tesla bought the idled factory in 2010, and started building cars there last year.
As a wider range of battery-powered vehicles are added to Tesla’s lineup, the Fremont plant will one day return to its pre-Tesla production level of 500,000 vehicles a year, Musk said, without elaborating. That was the factory’s capacity in its GM-Toyota period.
Additions to the company’s lineup include the Model X sport-utility vehicle, due in late 2014, and a sedan to be introduced later that’s smaller and cheaper than the Model S as well as a compact SUV. The company has also discussed a next-generation Roadster sports car, Tesla’s first product.
“We going to have every kind of car you could possibly imagine,” Musk joked during this week’s interview. “If it moves, we’ll make it.”
Under Musk, 42, Tesla repaid a $465 million U.S. Energy Department loan nine years ahead of schedule. Tesla also said in May its first-quarter profit was aided by sales of $67.9 million in California zero-emission vehicle credits to companies it didn’t name.
Musk said in a May conference call the company was projecting such credit sales would drop in the second quarter and may disappear in 2013’s second half.
“While I’ve been skeptical, I’m impressed with what they’ve done so far,” Brauer said of Tesla. “The list of dead car companies over the last 10 years is long and distinguished - - and they’re not on it.”
Tesla yesterday gained 2.7 percent to $125.61 in New York, a record closing price. The company’s shares have surged 271 percent this year, compared with an 18 percent increase for the Russell 1000 Index.
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