Tesla investors lower the voltage
NEW YORK -- Tesla's (TSLA) stock is sliding in premarket trading Thursday as the electric car maker's fourth-quarter performance was stung by delayed shipments and a stronger dollar.
After the market closed on Wednesday, Tesla reported an adjusted loss of 13 cents per share and adjusted revenue of $1.1 billion. This fell short of the forecasts of analysts polled by FactSet, who were looking for a profit of 30 cents per share on revenue of $1.23 billion.
Tesla said during the period shipments of its new all-wheel-drive Model S sedan were delayed. The Palo Alto, California, company said it held back shipments of the new version of its Model S sedan -- which was launched in November -- to make sure it would meet customers' expectations. While it was able to make up production later in the quarter, it was unable to ship about 1,400 vehicles in December.
Brad Erickson of Pacific Crest Securities said in a client note that "the delivery shortfall does raise execution concerns." But the analyst said Tesla is growing more than 60 percent this year and may grow 80 percent to 90 percent next year, so he doesn't believe the current valuation represents the company's longer-term opportunity.
Erickson kept an "outperform" rating.
Shares of Tesla Motors Inc. dropped $16.30, or 7.6 percent, to $196.50 in premarket trading about an hour before the market opens.
Tesla Motors CEO Elon Musk said he expects the company to turn a profit in five years, after it brings a lower-cost car to market. Speaking at the Automotive News World Congress in Detroit on Tuesday, Musk said Tesla will start showing a profit when it's selling 500,000 cars per year. He predicted that sales milestone will be reached in 2020, when the Model 3 is in full production.
The Model 3 is priced at $35,000, about half the price of Tesla's Model S. In addition to developing the Model 3, Tesla's crossover SUV model X is expected to hit the market this summer, after several delays. Musk said technical difficulties with the rear doors, which open up instead of out, have delayed the launch.
Another concern lurking in the background for all electric vehicles is the recent plunge in gasoline prices. Though they've ticked up again from their multiyear lows, if they remain depressed, demand for alternative fuel autos is likely to wane.
Related to gasoline is "range anxiety" -- and it gives gas-powered cars a big edge. A top-of-the-line Tesla can go up to 270 miles before it needs recharging, but most electric cars settle in the 80-mile range. Uncertainty about range and the spotty charging infrastructure have limited electric car sales to less than 1 percent of the U.S. market.
But interested buyers could have more choices soon. Technology is rapidly improving, and both Tesla and General Motors (GM) are promising lower-priced cars with a 200-mile range by 2017. That might be just in time if gas prices rise again, as most analysts expect.