DETROIT (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.”
Reporting By Deepa Seetharaman; additional reporting by Norihiko Shirouzu; Editing by Paul Tait and Stephen Coates