PALO ALTO -- Tesla Motors (TSLA), while reporting a wider quarterly loss, sought Wednesday to assure Wall Street it remains on track to deliver 5,000 units of its all-electric Model S sedan by the end of 2012.
No cars have been delivered to customers since a highly-publicized June 22 event, when the company handed over the keys to the first 10 cars a month ahead of schedule. Analysts are questioning the company's ability to sharply ramp-up production in time to meet the year-end target.
Revenue plunged to $27 million in the second quarter, down from $30.2 million in the first quarter and $58.2 million a year ago. The company also posted a wider loss of $106 million, or $1 a share, compared with a loss of $89.9 million and 86 cents a share in the previous quarter. The company said it still expects to generate $560 million to $600 million in revenue for 2012.
In a letter to shareholders released Wednesday, Palo Alto-based Tesla says it plans to deliver about 500 vehicles to customers in the third quarter and the additional 4,500 cars in the fourth quarter.
"We've made a total of 40 production vehicles so far," CEO Elon Musk said in a conference call with analysts. "The production steps up in a geometric and exponential
Musk said that he personally inspects cars when he can and blamed some of the production delays on issues with suppliers who did not meet Tesla's quality standards, including for some interior fabric and the chrome plating of door handles.
"There are these little things that are extremely annoying," Musk said. "They are mostly interior, soft trim issues."
Several analysts peppered Tesla with questions about the exact nature of Tesla's "S-curve." Tesla is currently making about 10 cars a week, a figure that will need to increase to 375 a week, starting in October, to stay on track.
"I don't think they'll make 5,000 cars this year," said Theo O'Neill, an analyst with Wunderlich Securities, who published a scathing research note earlier this week. "They are going to have to raise more cash, and the fact that they haven't gotten the interior right is a problem."
The company says about 12,200 customers have put down reservations for the Model S as of mid-July, a pace that has accelerated. Tesla plans to open additional retail stores in the densely populated Northeast, including one on Long Island, N.Y., and two in northern New Jersey.
Contact Dana Hull at 408-920-2706. Follow her at Twitter.com/danahull.
Headquarters: Palo Alto
CEO: Elon Musk
Number of employees: 2,000 employees worldwide, including about 800 at the Fremont factory
Vehicles: Roadster and Model S. The first 10 Model S cars were delivered to early investors of the company in June; Tesla plans to deliver 5,000 Model S cars by the end of 2012.