News Column

Tesla reports profit, progress on 'Gigafactory'

August 1, 2014

By Chris Woodyard, @chriswoodyard, USA TODAY

Tesla Motors CEO Elon Musk on Thursday pointed to Nevada as the leading site for the electric-car maker's much-anticipated Gigafactory, a $5 billion project that could create up to 6,500 jobs.

Musk says excavation has begun at a site near Reno, but Tesla will await action by Nevada's legislature and governor before naming it as the official site. California, Arizona, New Mexico and Texas are also in the running. Tesla has said it's likely to choose more than one site.

Also Thursday, Tesla released its second-quarter earnings results after the market closed. It earned $16 million for the quarter on an adjusted basis, or 11 cents a share, handily beating analysts' estimates. On an unadjusted basis Tesla lost $61.9 million compared with $30.5 million a year earlier.

Tesla shares rose almost 1% in after-hours trading immediately following the announcement, but then fell about 2%. The stock was trading for about $223 a share. Revenue was $769.3 million, up from $405.1 million year earlier. The production line at its Fremont, Calif., plant is being remodeled to allow for production of up to 1,000 vehicles a week.

Tesla said it made a record 8,763 cars in the quarter and delivered 7,579 of those ahead of previous guidance. It plans to make 9,000 in the third quarter on the way to its prediction, holding thus far, of 35,000 deliveries this year.

Currently, Tesla only sells a single car, the Model S luxury sedan, which starts at around $70,000. First prototypes of Tesla's Model X crossover are expected to be ready next week, keeping the vehicle on target for start of sales next spring. In addition, the company is working on a mass-market vehicle, the Model 3, that is still years away.

That model will depend on lithium-ion batteries and packs made at the Gigafactory. Tesla announced Thursday that it has signed a deal with battery maker Panasonic to actually make the cells at the Tesla factory.

Musk says Tesla is going to pick up about half of the cost of the factory, with Panasonic contributing about 30%, the state chipping in 10% and the rest shouldered by suppliers.

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Source: USA Today

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