Musk: Tesla aims for profit in 2013
Tesla CEO Elon Musk: "I'm hoping we'll have a profitable quarter this year. Shame on us if we can't achieve that."
DETROIT -- (Reuters) Tesla Motors Inc. aims to earn its first profit later this year and launch a cheaper electric vehicle within three to four years, CEO Elon Musk said.
The 10-year-old electric car maker has reached its target production rate for the Model S of 20,000 a year and expects to launch the Model X, a luxury crossover built on the Model S platform, in the second half of 2014, he said.
"Now, the tough thing for Tesla is to actually make a profit for the first time," Chief Executive Elon Musk said on Sunday, while accepting an award in Detroit. "That's, I think, when you start being a real company."
Musk told reporters that a quarterly profit was more likely toward the end of 2013, rather than the beginning of the year. Analysts expect Tesla to show a profit of 6 cents per share in the third quarter of 2013, according to Thomson Reuters I/B/E/S.
"I'm hoping we'll have a profitable quarter this year," Musk said after the event held a day before a media preview of the Detroit auto show. "Shame on us if we can't achieve that."
The automaker, founded by Musk, went public in 2010. The Model S is the company's second-generation vehicle, after the Roadster electric sports car. The Model S starts at nearly $60,000 before a federal tax credit.
Tesla is also working on a third-generation vehicle that would cost around $30,000 to $35,000, Musk told reporters. The vehicle will be smaller than the Model S and roughly the size of BMW's 3-series sedan.
Tesla's lineup costs between $60,000 and $120,000, representing the "sweet spot" of demand for electric vehicles, J.P. Morgan analyst Ryan Brinkman said in a research note last month.
Brinkman expressed concerns about Tesla's cheaper EV, saying demand for mass-market electric cars was "spottier."
Musk was given the global industry executive of the year award at the third annual Motor City Automotive Industry Night (MAIN) on Sunday.
Despite the success of the automaker’s Model S, named Motor Trend’s 2013 car of the year, Musk acknowledged the company’s challenges that still lie ahead.
“We really were trying to show the world that an electric car can be the best car … I’m really glad we’re able to achieve that point with the Model S,” Musk said. “And now the big challenge is to actually have a profitable quarter for the first time in nine years so we’ll see if we can accomplish that this year.”
Moray Callum, Ford Motor Co.’s executive director of Americas of design, was also honored as industry innovator of the year.
In his remarks, Callum praised Musk and Ford CEO Alan Mulally.
“Design is a lot easier when your senior manager of the company you work for actually recognizes the importance of design,” Callum said. “So I think from Alan Mulally down, I’d really like to thank Ford.”
Reuters and Theresa Clift contributed to this reportContact Automotive News