EV pioneer has lost £545m in the first three months of this year despite strong sales
28 May 2019

Tesla’s financial woes continue even as the Californian company sets jaw-dropping records for sales of its electric Model 3 saloon across continental Europe and predicts the imminent arrival of autonomous ‘robotaxis’

CEO Elon Musk predicted three months ago that Tesla would make a profit in the first financial quarter of this year. Instead, it posted one of its worst three-month results, losing $702 million (£545m). 

Musk blamed delays in Model 3 production, as well as losses caused by a slip in residual values for its ageing Model S and Model X cars. Tesla has posted a profit in only four quarters since 2010 and has never had a profitable year. 

Demand might be cooling in the US, but not for Europe, at least for the new Model 3. Across Europe, according to car industry analyst Jato Dynamics, 14,652 Model 3s were registered in March, an astonishing result that surpassed sales of the BMW 3 Series and the Audi A4 (estate and saloon). Of that number, 5315 were sold in Norway, Europe’s leading electric car market, giving the Model 3 a staggering 29% of the market. 

Next year, Tesla will start selling an SUV version of the Model 3, the Model Y, and Musk recently predicted that it would ultimately become more popular than the Model S, Model X and Model 3 combined. 

However, problems are mounting up for Tesla. As well as finishing the Model Y, it needs to find money to complete a new factory in Shanghai, China, scheduled to start later this year, as well as develop the new Roadster sports car and an electric truck, the Tesla Semi. A recent video from China showing an early Model S apparently spontaneously catching fire has also (literally) reignited safety fears surrounding its cars.

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Meanwhile, EV competitors are stacking up, including the Jaguar I-Pace (1503 European sales in March, beating the Model X at 874), the Audi E-tron and Mercedes EQC. More affordable electric models, particularly from the Volkswagen Group, are due next year to rival the Model Y’s launch, as will Ford’s ‘Mustang-inspired’ Mach E SUV

Despite the headwinds, Tesla’s share price remains stratospheric, much to the annoyance of the infamous ‘shorts’ (the short-seller investors who bet against Tesla succeeding) and the traditional car firms. 

A Ford of Europe spokesman tweeted last week: “Since 2009, Tesla has lost $6.4 billion. In the same time frame, Ford has made $71.6bn. And yet as of today, Wall Street values Tesla at $45bn and Ford at $38bn. World is mad.”

Even those who recommend buying Tesla stock have to qualify their enthusiasm. “Our Tesla call is hard to live with at times but we see value in Tesla’s EV/connectivity technology and experimentation. We remain confident there is a path to sustained profitability,” Philippe Houchois, analyst at financial research firm Jefferies, wrote in a note after Tesla’s recent poor results. 

That ‘experimentation’ ranges from the useful, such as over-the-air updates, to the wildly improbable. Falling into the improbable category are Musk’s claims that advances in Tesla’s autonomous tech will allow owners to send off their private cars to work as self-driving ‘robotaxis’ by as early as next year. He said the earning potential means we’d all be “financially insane to buy anything other than a Tesla”. 

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Financial analyst Jeffrey Osborne at Cowen, a bank, called the plan “half-baked”. It’d also be unworkable across most regions until autonomous cars are given type approval. But right now for Tesla, even self-driving looks more achievable than self-financing.

Nick Gibbs

Read more

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Elon Musk claims Tesla will have robotaxis on roads by 2020​

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Comments
41

28 May 2019
Maybe Ford's valuation is lower because its the Kodak of our time?

28 May 2019
That Ford quote really provides some perspective.

29 May 2019
shiakas wrote:

Maybe Ford's valuation is lower because its the Kodak of our time?

I mean... Kodak is the Kodak of our time.

Ford announced 13 electrified hybrid / full EV variants to be released in the next 2 years at the end of last month... and they had a full electric Escort produced between 1981 and 1994.Ford is the Tesla of the 80's.

28 May 2019

Maybe Tesla's is high because it's the WorldCom of our times.

28 May 2019
Always with the negatives here at Autocar, let's forget shall we that last year Autocar said Tesla would be bankrupt before the end of 2018, and then the year before that the Model 3 would never come out, and somehow they think a Jaguar I-Pace is better than a Model S, and a Model 3 isn't as good as a 330i.

Tesla is *still* the only company I would buy an EV from, the supercharger network, the first in class infotainment, and super efficient cars are only 3 of the many ways they're still years (& miles) ahead of any traditional manufacturer.

Now the UN knows this, and has started to take action to limit their advantages in other areas, and with the EU signing the bill to slow the rate of progress for Autopilot they've ended up making it MORE dangerous - by limiting the rate & amount "autonomous" systems can turn the steering wheel, and introducing a timeout to Auto lane changes which doesn't give them long enough to finish, meaning the car jerks across lanes to keep within this stupid new ruling. (If you so wish, go and look at the coverage on YouTube & you'll find I'm right.)

All this tells me is the Eurozone doesn't like being beaten with new tech, and so slows the rate of development for the leader until the rest of the slow & unwilling can catch up.

Not only that, where are these supposed "Tesla Killers" we've been told about for years? I-Pace? Selling less than 1000/month, e-tron? (poop in French) limited production due to battery constraints. Kia e-niro/Hyundai Kona Electric? Limited production due to battery constraints & selling at a loss.
All these companies laughed when Tesla had issues producing cars, & the media were all over it. Show me the constant, almost harassing, articles now that Mercedes & Jaguar, & Audi are all having the same issues. There aren't any. Pure bias from the media, they don't want Tesla to succeed and will do *anything* to twist news into a bad thing for the company.

I could go on but alas I expect many replies to this about being a fanboy etc, of which I am, but you cannot deny the fact that the Tesla EVs are still far better in ownership proposition than any other EV, & that sites like Autocar spew content that constantly claims they'll be out of business, bankrupt, or didn't hit production targets when in fact neither did anyone else - just the Tesla article will get clicks, and at the end of the day that's all that matters to them.

28 May 2019

Spot on, autocrap mag is going all out albeit in a more subtle way to kill Tesla 

It is a major supporter of JLR products that has lost billions and are awful products to boot but you never hear that.

Time will tell about Tesla but the constant berating of a company that has been the catalyst for changing to world to a more sustainable cleaner world is risable to say the least.

The only major gripe I have about musk is his timelines, but his company is only 15 years old and is still undergoing huge growth spurts.

No one else has done what he has achieved let alone attempted it.

More power to him.

28 May 2019
lambo58 wrote:

is still undergoing huge growth spurts.

Sorry, what?

Did you read the article?

28 May 2019

Youve just proved my point...

28 May 2019

Knock Jaguar all you want but the I Pace is outselling the Tesla Model S in most of Europe now. Also they’ve designed, engineered and delivered an electric car faster than their peers and don’t have all the financial and real world problems that Tesla have.

Nissan, Hyundai and Renault meanwhile continue to sell lots of electric cars at the bottom end of the market. Tesla should have used their market cap to buy another car maker that knew how to make cars, instead they are on the slippery slope to failure.

28 May 2019
TStag wrote:

Also they’ve designed, engineered and delivered an electric car faster than their peers and don’t have all the financial and real world problems that Tesla have.

LOL - wow, how wrong. The iPace underperforms the Model S and Model X by a huge margin for speed and real-world efficiency. The battery management software sucks in the iPace. Then, don't talk financial problems... How many BILLIONs did JLR lose?  

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