Here’s Why Tesla Needs the Model S to Win Big
Electric car maker Tesla Motors (NASDAQ:TSLA) lifted its revenue outlook for the year to between $560 million and $600 million from the earlier $550 million after announcing it was likely to launch its Model S sedan slightly ahead of schedule. Tesla said safety tests required by U.S. regulators were close to getting completed on the Model S, and that it could begin delivering the sedan to customers in June, ahead of its previous target of July.
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The sunnier look came despite the automaker reporting much lower-than-expected first quarter earnings and revenue. Revenue in the three months ended in March fell 38 percent year-over-year to $30.2 million, with a loss of 76 cents a share from 44 cents a share a year ago. Analysts had predicted $32.2 million in revenue and a net loss of 71 cents.
Tesla is pitching the new sedan as its big bet for the year, described 2012 as a “year of two halves” with the Model S launch as the dividing line. Over 10,000 pre-orders have been received for the Model S and the company says 90 percent of its revenue this year will come from the car.
“We plan to continue making customer deliveries on a slow, methodical ramp, and remain confident in our target of 5,000 vehicle deliveries by year end,” chief executive officer Elon Musk said in a statement.
The sedan, with a range of 300 miles a charge depending on the battery pack, is priced at $57,400, half the cost of the Roadster sports car Tesla has sold since 2008 but whose sales have now ended.
The company added that it had made a deal with Daimler, an investor, to create an electric powertrain for a new Mercedes- Benz EV. “This program is expected to exceed in value the sum of all powertrain agreements signed in Tesla history,” the company announced.
Shares gained 7.55 percent, or $2.27, to be at $32.33 in after-hours trading.
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