The automaker posted losses but is determined to ramp up its production plans
On Wednesday, Tesla Motors Inc. announced that it is looking forward to accelerate its annual production and achieve the goal of half-a-million vehicles around two years earlier. But, the luxury electric car maker has to achieve this target without the guidance of two top manufacturing executives.
The Palo Alto, Calif. firm disclosed its quarter’s earnings on Wednesday and, in comparison with the year-ago same period, the automaker’s loss has doubled although the company did manage to bolster its sales of luxurious sedan and sport-utility vehicle. In order to avoid negative cash flow in the current year, 2016, the automaker surrendered a plan so that it can pour in some money to ramp up the production of the affordable “Model 3” which –at a price of $35,000 –will help the auto-tech giant to sell 500,000 by 2018.
The company is planning to roll out the highly anticipated car sometime in the second half of the next year. As of now, the company has set a goal of producing a total of 100,000 to 200,000 by the year end.
The Californian automobile behemoth has faced a lot of hurdles and difficulties in manufacturing its current products on time and glitches free. The company’s clean image was tarnished when, over the course of last six months, the problems with the Model X SUV doors and seat latches come on the surface. The initial price of Model X starts from $81,000.
Tesla Motors made it public on Wednesday that two of its executives –Manufacturing Vice President Josh Ensign and Production Vice President Greg Reichow will no longer be part of the company in the future. Mr. Reichow has been with the company since 2011 and had previously been in charge of powertrain engineering. He will remain in the company until his position is not filled while Mr. Ensign who had lead manufacturing has already departed from the company.
The departures, however, are not out of ordinary. Since its inception, back in 2003, Tesla Motors has lost number of its executives as the arch-rivals recruited automaker’s employees. Some recent departures from the company include, Vice President of Worldwide Finance and its assistant vice president of regulatory affairs, Michael Zanoni and Jim Chen.
On a conference call with the investors, Tesla’s Chief Executive, Elon Musk said, “Tesla is going to be hell-bent on becoming the best manufacturer on earth. Thus far, I think we’ve done a good job on design and technology on our products. The key thing we need to do in the future is to also be a leader in manufacturing. It’s a thing we need to obviously solve if we are going to scale and scale rapidly.”
The analysts from Wall Street have been closely monitoring the cash burn of the company and several analysts have opined that the company had to sell some additional shares in order to pile up some cash for adequate production.
The current production goals have been coined on the basis of the humungous 400,000 reservations which came in after the company debuted its Model 3. For the quarter, the reservations called for $1,000 in form of refundable deposits and garnered hundreds of millions of dollar in new funds. According to the officials, the money poured through reservations strengthened the confidence of the company.
The company has reported a loss of $283 million –or EPS of $2.13 –on the revenue of $1.15 billion. After the announcement of earnings, at the after-hours trading, the share of the company jumped up 3.1% and rested at $229.50.