Tesla Stays True to Brand, Selling Cars and Losing Money


Tesla Model X

Tesla Motors is selling a lot of its original Model S vehicles these days, but it’s costing the company a lot of money to gear up to┬ásell its next nameplate, the Model X utility vehicle, as well as to prepare to launch its mainstream-priced Model 3 by the end of next year.

Thus the closely watched electric-vehicle company posted a fourth quarter net loss of $320 million, nearly tripling its deficit of a year earlier and comprising its 11th consecutive quarterly loss. “The last several months have been quite excruciating,” CEO Elon Musk said on a conference call.

But, of course, customers, investors and competitors have gotten used to holding Musk and Tesla to different standards than the rest of the industry. The brand has been having a truly transformative effect on the luxury electric-vehicle market with its $70,000-and-up Model S and has struggled markedly to get a follow-up vehicle into the market.

When it finally comes out after many months of delays, Model X will hit a US market where luxury SUVs of all sorts are at an all-time high in popularity. Also, however, competitors such as the German brands have had time to introduce their own new conventional and electrified new models.

In any event, by the end of next month, Tesla said that it plans to be producing 1,000 a week of its $81,000 Model X and that it could build up to 90,000 vehicles overall this year, which would be about 80 percent higher than its 2015 production.

Meanwhile, Tesla said that deliveries of its Model S and the beginnings of deliveries of Model X jumped by a total of 76 percent in the quarter, year-over-year. This means, among other things, that the plunge in gasoline prices hasn’t dimmed the enthusiasm of Model S buyers who really want to be seen in a Tesla.


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