January 14, 2013 / 3:25 AM / 7 years ago

UPDATE 1-Tesla CEO aims for profit in 2013

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.”

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