There is a lot that goes into starting a new car company. It’s the reason why Tesla’s 2011 Initial Public Offering was the first for an American automaker since Ford way back in 1958. As a public corporation, Tesla has begun giving financial guidance and forecasts to its shareholders. For a while, the official line has been 5,000 vehicles produced by the end of the year.
That was before production started. The Model S began production in June of this year (a month ahead of time), but since then things have moved slowly. Chief Executive Officer Elon Musk has insisted on quality, inspecting each one of the cars that has come off the line so far. The problem with Model S its that a huge portion of the components are found only in it, and a small percentage of them are delaying production of the rest of the car.
The impact has been detailed in Tesla’s latest filing with the Securities and Exchange Commission. Originally the company had expected to rake in $560 to $600 million in revenue this year. That figure has been revised downward to $400 to $440 million in revenue, due to a reduction in the amount of deliveries. Instead of 5,000, the company is expecting over 2,500 Model S’ to be built by the end of the year. Tesla says it is four weeks behind its delivery goals. Like we’ve heard earlier, the problem is with suppliers.
Tesla says that it is also adding new shifts and extra automation to speed up the process. Profitability is still on track for 2013, after racking up $864.9 million in losses through June 30th. Ouch. Good news is that Tesla continues to receive new orders for the Model S, with the reservation tally up to 13,000 as of Monday, September 23rd. The problem now though clearly isn’t demand – they just can’t build them fast enough.