This should thrill investors. During the Tesla earnings call, CEO Elon Musk spoke about keeping the company’s cards close to the vest. “People have gotten used to us showing all of our cards,” Musk said. “We’re not currently showing all of our cards.” Well, we know you definitely haven’t picked up a map, because the location of the Gigafactory is still to be decided on.
He went further, saying numbers are better than they appear, because well, it’s a secret. “Our capex and R&D numbers are better than they appear because there are things you don’t know about.” Well, we know you’re spending money like your Amazon, and I don’t see Teslas running up and down every street.
For now, a location near Reno, Nevada is undergoing site preparation work. Don’t get excited, Tesla maintains that two other states are still in contention. Once the plant is finally complete, it will employ around 6,500. So, the Gigafactory would be a huge win for whichever governor secures it.
Panasonic has been tapped to help with the factory, though the extent of the help is unknown at this point.
The company is churning through cash as it ramps up production of the Model S, invests in the development of the Model X SUV, builds out the nation’s largest network of charging stations and expands into Asia. Somewhere in there it’s going to have to start selling a lot more cars.
During the call, investors and the public got a glimpse at the possible future of automotive service. The company wants to take a ‘pit crew’ approach by bringing in the pros from Formula 1 racing. That would be a new look at your local Jiffy Lube. The one-minute oil change. Hit me with two new tires, and it’s feeling a bit loose as I corner in school zones.
Tesla is on pace to deliver 35,000 cars this year, and Musk predicts Tesla will deliver more than 100,000 next year. He is relying on predictions that the company will be manufacturing 1,000 Model S and X’s each week.
The 100,000 mark will involve significant investment outside the manufacturing process. Tesla plans to open 300 new charging stations globally, with 100 opening in China.
Revenue Climbs With Losses
The spending by Tesla doubled its losses to $61.9 million in the second quarter. Revenue doubled as the company hit $769.4 million. Deliveries of the Model S hit 7,579, just above its forecast of 7,500. It did revise deliveries lower for the third quarter as the company shut down manufacturing for two weeks to add a new assembly line.
Investors will be watching the upcoming quarters with interest. It’s all fine and good to keep your cards close to the vest, but the cash bleed will only be put up with for so long. Wall Street will want to see definitive progress on the Gigafactory and the company’s other investments.