LITTLE ROCK — Tesla Motors Inc., the maker of electric cars, plans to increase output by at least 25 percent this year after earnings were hurt by startup snags that drove up costs in 2012.
The company’s shares fell the most in almost five months Thursday after it posted a quarterly loss that missed analyst estimates.
Production of the rechargeable sedan at Tesla’s Fremont, Calif., plant will probably reach 500 a week in mid-2013 after climbing to 400 a week in December, said billionaire Tesla Chief Executive Officer Elon Musk. The company will hold off on increasing output until it can reduce the amount of overtime paid and delays in parts shipments it faced in 2012, he said.
The carmaker, named after electrical-device inventor Nikola Tesla, said it plans to deliver 20,000 of its lithium-ion battery-powered sedans this year, after falling short of an initial target of 5,000 in 2012. Tesla is counting on demand for the car, priced from about $60,000, to help it turn profitable as early as this quarter, with growth accelerating when the Model X crossover vehicle is added in 2014.
The shares rose 95 cents,or 2.7 percent, to close Friday at $36.11.
“I want to keep the company on a steady production pace and focus on efficiency,” said Musk, 41, Tesla’s biggest shareholder. “We need to level off and focus on running a real tight ship.”
Production at its Fremont factory may increase beyond 500 a week toward the end of the year if there’s demand, he said.
The Palo Alto, Calif., company reported a fourth-quarter loss that was larger than analysts anticipated Thursday after the markets closed, blaming a jump in operating costs during the start of production.
Operating expenses rose 29 percent to $114.7 million in the quarter because of higher logistics costs and component prices, the company said.
Musk said the share price drop in extended trading Thursday was due to a misconception about demand for the Model S.
“If we were to close all of our stores today, we’d be sold out basically for the whole year,” he said. “We’ve got reservations for roughly 15,000 cars, over and above what we’ve already delivered.”
Shipments of Tesla’s Model S to Europe start in the third quarter this year, and to Japan and Hong Kong in the final months of 2013, the company said. Tesla also is preparing to sell the car in China, said George Blankenship, vice president of sales.
“We’re under construction on a store in Beijing that will open in the spring,” Blankenship said in an interview. “It’s going to be one of the larger stores, with respect to the China market size.”
With the addition of those markets and higher production, deliveries may increase 50 percent in 2014 from this year, Musk said.
“I think 30,000 units in 2014 is a pretty reasonable target,” he said. “That’s with a little bit of X in the mix.”
The fourth-quarter net loss widened to $89.9 million, from $81.5 million a year ago, Tesla reported Thursday. Excluding some items, the loss was 65 cents a share, compared with 69 cents a share a year ago. Analysts on average estimated a loss of 57 cents, according to data compiled by Bloomberg.
Tesla now expects to post a profit excluding certain items in the first quarter, as sales of the sedan expand. Analysts on average had projected an adjusted loss of 23 cents a share in the first quarter.
“Our focus in the first quarter is making sure we’re profitable as promised,” Musk said. After that, “we’re certainly going to try to be profitable every quarter.”
Tesla’s Model S, with a base price of $59,900 before a $7,500 U.S. tax credit, travels as far as 300 miles with a full charge, according to the company. The U.S. has certified Model S range of being between 208 miles and 265 miles, based on battery size.
Sales in the fourth quarter jumped more than sevenfold to $306.3 million, from a year earlier, in line with the average analyst estimate of $306.1 million. The company delivered 2,650 vehicles to customers last year, including 2,400 in the fourth quarter. The delivery goal this quarter is 4,500.
Business, Pages 27 on 02/23/2013