UPDATE 1-Tesla CEO aims for profit in 2013

Sun Jan 13, 2013 10:23pm EST

By Deepa Seetharaman

DETROIT Jan 13 (Reuters) - Tesla Motors Inc, maker of the Model S electric sedan, aims to earn its first profit later this year and launch a cheaper electric vehicle within three to four years, Chief Executive 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."

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (5)
grizzmann wrote:
How much did the government Henry Ford to start his car company?

Jan 14, 2013 5:05pm EST  --  Report as abuse
terracares9 wrote:
Very cool car. I had a close-up at a showroom in AZ. I guess if you gave me 456M to spend I could probably show you how to make more than 6 cents after 10 years though.. Typical Obama Biz returns. nope, this one may make something..

Jan 14, 2013 5:06pm EST  --  Report as abuse
johnlcallaway wrote:
It may be legally, but I don’t think it’s a profit until he pays the loan back…..

Jan 14, 2013 5:27pm EST  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.